Italy Plans 26% Exit Tax on Wealthy Residents Who Move Abroad, Putting Its Millionaire Boom at Risk

Italy has spent the past decade selling itself as one of the friendliest places in Europe for the very rich. Its draft 2027 budget now sends a different message to anyone thinking about leaving. Giorgia Meloni’s government has proposed a 26% “exit tax” on the unrealised gains of residents who move their tax residence abroad while holding at least €800,000 in covered assets, a measure The Telegraph reported was not trailed in advance.

The proposal is still a draft and Parliament can change it. But because of how it is timed, wealthy residents, foreign retirees and the advisers who serve them have to start planning now.

What the Draft Exit Tax Would Do

The measure sits in Article 17 of the draft budget bill. According to analyses by the Italian tax advisory site Taxing.It and the legal publication Coinlex, an individual would be caught when three conditions are met at the same time:

• They were Italian tax residents for at least six of the ten tax years before the move.
• The assets covered by the rule, such as shareholdings, stocks, bonds and other financial instruments, are worth at least €800,000 in total.
• The move ends Italy’s right to tax the income from those assets.

Citizenship doesn’t matter. The rule could apply to Italians and to foreigners who settled in Italy. The tax falls on gains that have built up but haven’t been cashed in, so someone could owe money on a portfolio they never sold. Il Messaggero stressed that this is not a levy on total wealth. It is a charge on accumulated capital gains.

Two details make the rule broader than the headline suggests. First, the €800,000 figure is a threshold for entering the regime, not an allowance. Taxing.It notes that a person with €900,000 of covered assets would not simply be taxed on the €100,000 above the line. Second, the 26% rate is not universal. Coinlex points out that crypto assets would face the 33% rate that applies to them, with 26% reserved for euro-denominated e-money tokens. Il Messaggero reports that Italian government bonds would get favourable treatment, with an effective rate of 12.5%.

Timing, Payment and Deferral

The draft would apply where the loss of Italian tax residence takes effect from January 1, 2027, with assets valued on the last day of the previous tax year. Taxing.It warns that because Italy generally sets residence for a whole year, someone who physically leaves in late 2026 could still be treated as resident for 2026 and fall under the new rules, with assets valued at December 31, 2026. The draft also contains no general reset of asset values to the date the regime starts, so gains built up long before the law could be taxed.

Payment would be due within 180 days of losing residence. People moving to another EU country, or to a country that both shares tax information with Italy and helps it collect tax debts, could defer, but only by paying 50% of the tax upfront and posting a suitable guarantee. The deferral window would run for five tax years after an EU move and ten for other qualifying destinations. The draft also provides relief in some cases, including assets still unsold at the end of that period, death, or a return to Italy.

A Small Revenue Line With a Big Signal

The money involved is modest by budget standards. Il Messaggero, citing the budget’s technical report, says the Treasury expects about €3.37 million in 2027, €6.74 million a year from 2028 through 2031, and €3.37 million in 2032. That suggests the measure is as much about discouraging departures, and closing a gap with countries that already have exit taxes, as it is about raising cash.

Italy would not be alone. The Telegraph notes that France already charges an exit tax at 31.4% on people with net worth above €800,000, and the United States taxes people worth more than $2 million when they give up citizenship or a green card. Il Messaggero says Italy is following the example of Germany and the U.S. in extending its existing corporate exit tax to individuals.

Why It Matters for Italy’s Millionaire Boom

The timing is awkward for a country that has been winning the global race for wealthy migrants. The Telegraph, citing Henley & Partners, reports that about 3,600 millionaires moved to Italy in 2025, putting it behind only the U.S. and the United Arab Emirates. Many came from Britain after the end of non-dom status. Il Messaggero cites Assonime research showing about 2,500 high-income foreigners chose Italy in 2025, around 40% of them from the U.K.

Italy first drew them with a €100,000 flat tax on foreign income in 2017. The Telegraph notes the government has since raised that charge more than once. An exit tax now adds a cost on the way out, not just the way in. Around 66,000 Britons live in Italy, and about 60% are 55 or older, according to British embassy data cited by The Telegraph. Many of them could have savings above the threshold and may one day move again.

What Business Owners and Investors Should Do Now

For founders, family offices and globally mobile executives, the lesson goes beyond Italy. Tax regimes that attract capital can change quickly, and a country that once rewarded arrival can start charging for departure. Practical steps include:

• Know your residence position. Taxing.It advises establishing your likely tax residence for 2026 and 2027 rather than assuming a late-2026 move puts you outside the rules.
• Keep cost records. The tax depends on the gap between market value and original cost, so reliable purchase records for every holding, especially private company shares, will matter.
• Plan for cash. Even with deferral, paying half the bill upfront on gains you haven’t sold could force asset sales or borrowing.
• Watch Parliament. The threshold, rates and start date could all change before the budget passes.

For businesses that serve wealthy clients, such as private banks, relocation firms, real estate agents and wealth managers, the draft is likely to create a rush of questions over the next two months. Firms that answer quickly will win that business.

The Bottom Line

Italy’s proposed exit tax raises little money, but it changes the math for anyone who moved there for low taxes and planned to leave later. Until Parliament finalises the budget, the safest assumption for wealthy residents is that the rules could apply to moves taking effect from January 1, 2027, and that planning should start now.

Edited by Coron @QUE.COM
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