Italy Still Draws Millionaires Despite 50 Percent Flat Tax Rise

Italy remains one of Europe's most attractive destinations for millionaires, according to a new report, even after it raised its flat tax on wealthy new residents by 50 percent this year. The Local Italy reported the finding on Wednesday, describing Italy as still leading Europe in the number of millionaires relocating in 2026.

The flat tax is a fixed annual levy that replaces ordinary income tax for people who move their tax residence to Italy, a mechanism designed to draw high-net-worth arrivals. Raising it by half was expected to blunt that pull. The report suggests it has not, at least not yet.

The finding matters beyond the treasury ledger. In the world press, Italy's flat-tax regime is usually discussed as a national instrument of fiscal attraction, set against the country's large public debt and its bond spread. The Local's report frames the rise not as a deterrent but as a price wealthy movers are still willing to pay.

For Sardinia the mechanism has a specific geography. The regime is national, but its visible effects concentrate on the island's luxury coast, above all the Costa Smeralda, which the foreign travel and business press routinely treats as a benchmark for Italian high-end tourism and second-home ownership. The report does not name Sardinia, and no regional figure is given here; what it establishes is that the national incentive still works after the increase.

That distinction is the one worth keeping. A national tax instrument drawing wealthy residents says nothing on its own about the island's interior, where depopulation and a fragile pastoral economy are the standing concerns. The two realities coexist: a coast that competes for international capital, and inland towns that lose residents. Whether the first can be made to serve the second is a question the report does not answer, and it should not be assumed.

What the report does establish is a direction of travel. If Italy continues to lead Europe in millionaire relocations even at a higher flat rate, the pressure on the coastal housing and services that absorb those arrivals will continue as well. For an island whose economy rests heavily on tourism, that is the practical consequence to watch as the budget season proceeds.