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Luxury real estate in Italy: Flat Tax benefits

We hear about flat tax a lot, lately: but what does it consist of?

It is a single proportional tax with an equal fixed rate for all taxpayers.

The basis of this system is equal taxation for all people under a certain income bracket.

An area, this, that is increasingly affecting the luxury real estate sector and that we have discussed in our Dreamer Talks.

Luxury real estate and flat tax

The Italian real estate market, especially for villas, luxury homes and historic mansions, is attracting the attention of the super rich from all over the world. Their choice to move to Italy seems to be dictated by the need to escape the heavy tax impositions present in their home countries, such as wealth taxes, limits on trade and higher overall taxation. The Italian tax system, particularly the flat tax, allows those with very large incomes who come from abroad to pay a fixed amount of 100,000 euros a year, plus an additional 25,000 euros for each family member. The results of this tax policy seem to be remarkable, with a significant increase in new residents choosing to settle in Italy: an estimated 1339+ have joined the tax-advantaged regime since 2021.

The decision to adopt a flat tax to attract wealthy foreign investors is a policy choice being made in many parts of the world to stimulate the economy and attract foreign investment. The phenomenon, which has seen particular interest from citizens from countries such as Britain, was the subject of analysis in an article in The Guardian newspaper.  Here it is highlighted how many of these ultra-rich, who include bankers, entrepreneurs and managers of large assets, have chosen to move to Italy because of the lower tax pressures compared to their homeland.

Brexit seems to have created a favorable environment for capital flight abroad. In the past, many pointed to “tax havens” such as the Cayman Islands or Dubai to benefit from a very low or nonexistent tax burden. However, the trend seems to have changed and Italy is now among the top destinations.

The charm of Italian luxury

Interestingly, in the post-Covid period there has been a significant growth in demand from wealthy foreigners to buy or rent villas in Italy, even those in need of renovation. 

Historic cities such as Rome, Florence, Venice, and Milan seem to be particularly sought after by this clientele, as well as the hilly areas of Tuscany and Sicily, which are experiencing an increase in demand as entrepreneurs seek to purchase mansions and large villas to invest in the tourism sector and benefit from a more favorable tax regime.

The attractiveness of the preferential tax regime in Italy, however, is not only attracting wealthy personalities, but also helping to stimulate investment by luxury brands, which are thus interested in specific areas of each city. The current trend in the real estate market seems to be focused on historic buildings in city centers, exclusive focal points.

Florence is among the major cities that is enjoying the large influx of buyers.

Tuscany has always been a popular destination for Luxury Real Estate because of its scenic and historic-artistic beauty, which exerts a strong attraction on those who are used to making high investments in residential properties.

The region, with its art cities such as Florence, Siena, Pisa, and Arezzo, picturesque rural landscapes, hills, and countryside, is a highly desirable place for those seeking a prestigious residence or historic home, and in addition to the attractiveness of the cultural heritage, also and quality of life make this a coveted destination for those seeking high-end real estate.

Purchasing luxury assets, including prestige properties, can be a more complex process than purchasing non-discretionary assets. This is often due to the specific needs of potential buyers trying to find an investment that perfectly meets their particular desires and requirements.

Dreamer has been able to fit into this complex purchasing process with a young and dynamic approach, focusing on a strong component of innovation. The team is able to understand the various needs and adapt to market dynamics in an agile and responsive manner, offering customized solutions.


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