Highlights
- Milan emerges as top choice for wealthy UK nationals leaving UAE.
- Italy's flat tax allows foreign residents to pay €300,000 annually on overseas income.
- Property prices in Milan surge 38 per cent over five years.
Super-rich UK nationals are increasingly choosing the Italian financial capital over Dubai, attracted by a tax structure that allows foreign residents to pay just €300,000 (£259,620) yearly on all overseas earnings, a negligible sum for the ultra-wealthy.
Armand Arton, who advises multimillionaire families on relocation, explains the shift. "Italy has the best benefits: a flat tax and good quality of life," he told The Guardian.
"People leaving the UAE can see themselves living in Rome or Milan quite easily as international, metropolitan centres" , he added.
The Italian scheme, introduced in 2017, permits new residents who haven't paid Italian taxes for nine of the past decade to avoid taxation on foreign income entirely by paying the annual flat fee.
They face taxes only on Italian earnings and capital gains from local investments made within five years of joining the programme.
Around 5,000 individuals have enrolled so far, according to Maisto e Associati law firm. Initially, most applicants were Italians returning from London's financial sector.
However, interest exploded after Britain abolished its non-dom status and Portugal tightened similar rules.
Transformation underway
The wealthy influx is reshaping Milan dramatically. Property values jumped 38 per cent over five years, with the city surpassing Venice as Italy's most expensive, averaging €5,171 per square metre last November.
Diletta Giorgolo, managing Sotheby's Milan office, observes the change. "We have had our special tax regime since 2017, but when the UK ended its non-dom status, we had a wave of new buyers coming to Milan."
International buyers now represent 30 per cent to 40 per cent more of the market compared to two years ago, seeking permanent residency rather than holiday homes.
Luxury brands are following the money. Private members' clubs Casa Cipriani and Soho House have opened Milan branches, while Via Monte Napoleone briefly topped global rankings as the world's priciest shopping street.
Italy's government recently raised the flat tax from €200,000 to €300,000, prompting accusations of "tax dumping" from France—claims prime minister Giorgia Meloni dismissed as baseless.
Whether Milan can permanently replace Dubai remains uncertain, though consultants believe the Italian city offers a compelling alternative for those prioritising European stability.
