In recent years, an increasing number of wealthy individuals have been considering moving to other countries. And, somewhat unexpectedly, Italy has become one of the most popular destinations. The reason is simple: you can enjoy a high standard of living there whilst paying less tax than in many other European countries. Italy has even faced criticism from the French government over tax breaks that are actively attracting wealthy foreigners.
Why Italy is a better choice than France
The differences between countries are particularly noticeable when it comes to taxes and housing costs. In France, you have to pay substantial notary fees when buying a property. A significant portion of this money goes to the state. In Italy, however, if it is your first home (known as a ‘prima casa’), these fees are significantly reduced or waived altogether.
There is another important difference: in France, there is a tax on high-value property. If someone owns property worth millions of euros, they pay an additional tax every year. In Italy, there is no such tax. France also has an annual property tax. In Italy, this does not apply to a primary residence, although a separate waste collection charge must be paid
Another major difference, according to Robert, is inheritance. In Italy, assets worth up to €1 million can be passed on to heirs tax-free. If the value exceeds this amount, the rate is just 4%. In France, the situation is quite different. There, the tax-free allowance is significantly lower – just €100,000. Anything exceeding this amount is taxed on a progressive scale, which can reach a maximum rate of 45%.
The main advantage is a flat-rate tax
Italy is of particular interest to very wealthy people. Robert explains: “I have friends who have already moved here because of the tax situation, and others who are just thinking about it. For high-income earners, Italy is very attractive thanks to its flat tax.”
The point is that the country has a cap on income tax. Even if someone earns a great deal, they still don’t pay more than a certain amount. At present, this stands at 300,000 euros a year. Until recently, the limit was 100,000, then 200,000.
For people who pay millions in taxes in other countries, this makes a huge difference. But there is one exception: US citizens are still required to pay tax on their worldwide income. Therefore, moving to Italy https://znaki.fm/places/italy-en/ does not offer them the same advantages.
A new wave of relocations
Robert says he has recently noticed a new wave of people moving abroad. Two of his wealthy acquaintances have moved to Italy from the UK. They used to work in the financial sector in London, but decided to move abroad after the UK changed its tax rules for wealthy foreigners. Experts add that even with a maximum tax of €300,000, Italy remains a good option for those earning over a million a year.
Furthermore, the country conveys a sense of stability and predictability – which is very important to high-net-worth individuals. Jérôme Barre, a Paris-based tax lawyer, also says that more and more people are considering the possibility of leaving France. They are concerned about frequent changes to tax rules and political uncertainty, particularly in the run-up to the 2027 elections.
However, most are still only considering such a move. Relocating requires significant preparation, and for business owners, it also involves transferring their business and paying the so-called ‘exit tax’.
Recent Comments