Millionaires Still Choose Italy as Flat Tax Rises 50 Percent

Italy remains one of Europe's most attractive destinations for millionaires, according to a new report cited by The Local Italy, even after the government raised its flat tax on wealthy new residents by 50 percent this year. The finding runs against the expectation that a heavier levy would push the very wealthy toward Switzerland, Monaco or Portugal.

The flat tax is a fixed annual charge on foreign income, available to people who transfer their tax residence to Italy. It has been one of the country's most visible tools for courting mobile capital since it was introduced, and the increase was meant to capture more revenue from those who use it.

The report's central claim is that demand has held. According to The Local Italy, Italy leads Europe in the number of millionaires relocating in 2026. The outlet does not give a regional breakdown, so it is not possible to say from this coverage how many of those arrivals settled outside the large cities.

The programme sits inside a wider budget arithmetic that foreign coverage has followed all year. The same week's reporting notes rising rents and a housing squeeze pushing onto the budget agenda, and the expiry of a diesel tax cut that farmers and fishers had counted on. In that context, a tax aimed at the wealthy is one of the few revenue lines Rome can raise without touching the payroll tax that weighs on ordinary workers.

For the deep South, the flat tax has always been a story told at a distance. The arrivals it attracts concentrate in Milan, Rome, Florence and the lake districts, where the housing stock, the schools and the international connections already exist. Molise, with roughly 289,000 residents and a shrinking labour force, has no comparable offer, and nothing in the foreign reporting suggests the scheme has been reworked to send capital into the interior.

That is the gap the region knows well. The same wire this week carries a separate report that would-be foreign residents are holding off on moving to Italy altogether, citing heavy tax obligations and a deteriorating health service. Put together, the two stories describe a country that can still sell itself to the very rich while struggling to convince ordinary arrivals, and a South that appears in neither calculation.

There is also a question of what the flat tax does to the places that receive it. Foreign coverage has repeatedly noted that the scheme's beneficiaries pay a fixed sum regardless of income, which means their contribution to local services is capped by design. Whether that is a fair trade is contested, and The Local Italy's report does not attempt to settle it.

What comes next depends on the budget. If the 50 percent increase fails to dent the inflow, as this report suggests, the government may treat the levy as a reliable source and leave it alone. If the numbers later turn, the interior will have little to show for the years when the money was arriving, because almost none of it was ever directed there.

For Molise the practical consequence is unchanged. The region's pitch to newcomers has rested on cheap housing, empty hill towns and a slower life, not on tax treatment for foreign income. That is a different market entirely, and the millionaire report, however favourable to Italy as a whole, says nothing about whether it is working.