Italy's €300,000 Flat Tax
Property and Mortgage for HNWI New Residents
From January 2026, individuals transferring tax residency to Italy can pay a single €300,000 lump sum on all foreign-source income — replacing standard IRPEF rates entirely. The regime is powerful. But it creates a specific mortgage challenge that most Italian banks are not equipped to handle.
The regime — updated 2026
€300,000 per year. All foreign income. 15 years.
How the regime works
The Regime dei Nuovi Residenti (Article 24-bis TUIR) allows new Italian tax residents to replace standard IRPEF on all foreign-source income with a single annual lump sum. From January 1, 2026, that sum is €300,000 per year, regardless of the actual amount of foreign income.
This means: whether your foreign income is €500,000 or €10,000,000, your Italian tax liability on that income is the same €300,000. The higher your foreign income, the more cost-effective the regime becomes.
Family members can be included for an additional €50,000 per person per year — each family member's foreign income is then also covered by their own flat payment.
What changed in 2026
The increase and the grandfathering rule
The progression
| Entry year | Annual lump sum | Family member surcharge |
|---|---|---|
| 2017–2024 | €100,000 | €25,000 |
| 2025 | €200,000 | €25,000 |
| 2026 onwards | €300,000 | €50,000 |
Source: Legge di Bilancio 2026 (Italian Budget Law 2026), in force from 1 January 2026.
Grandfathering — important if you already opted in
Italy has fully respected the grandfathering principle: existing beneficiaries are not affected by the 2026 increase.
If you opted into the regime before 2026 and were paying €100,000 or €200,000 per year, you continue on those original conditions for the remainder of your 15-year window. The new €300,000 rate applies exclusively to individuals establishing Italian residency from January 1, 2026 onward.
This makes the current situation asymmetric: someone who moved in 2024 pays €100,000/year; someone moving in 2026 pays €300,000/year — for the same regime. Timing of relocation matters significantly.
Eligibility
Who can apply?
Required conditions
Is it worth it at €300,000?
The flat tax becomes cost-effective when your foreign income exceeds approximately €650,000–€750,000 per year — the break-even point where €300,000 is less than you would pay under standard IRPEF rates (which reach 43%).
Below that level, alternative structures — Impatriati (for employment income), standard residency, or non-domiciled arrangements in other jurisdictions — may be more efficient. The right answer depends entirely on your income composition.
The challenge most buyers hit
Why standard Italian banks
cannot process this profile
The invisibility problem
Italian retail banks assess mortgage affordability using declared IRPEF income from the modello 730 or Redditi PF — the standard Italian tax return. Under the flat tax regime, foreign income is not declared analytically. Only the €300,000 lump sum payment appears.
A standard Italian bank credit team, looking at a flat tax applicant, sees a tax return that shows no salary, no dividends, no capital gains — only a €300,000 lump-sum payment. Their internal scoring systems are not built to interpret this. The result: rejection, or an offer sized against zero declared income.
This is not a problem with the borrower. It is a problem with the bank's tooling. The solution is using the right bank.
How to solve it
The reality for this buyer profile
Buyers relocating to Italy under the €300k flat tax are often purchasing properties in the €1M–€5M range. Most pay cash because they've been told — or assumed — that a mortgage isn't possible. In some cases, a structured mortgage preserves liquidity and improves portfolio allocation. It is more complex to arrange, but it is possible — with the right bank and a properly prepared file.
Choosing the right regime
Flat Tax vs. Impatriati — key differences
| Dimension | €300k Flat Tax (Art. 24-bis) |
Impatriati Regime (Art. 16) |
|---|---|---|
| Income covered | All foreign-source income | Italian employment / self-employment income only |
| Tax structure | €300,000 fixed lump sum/year | 50% exemption on qualifying Italian income |
| Break-even income | ~€650k–€750k foreign income | Any level — percentage-based |
| Duration | Up to 15 years | 5 years, no extension |
| Location restriction | None — anywhere in Italy | None |
| Prior residency gap | 9 of last 10 years non-resident | 3 years non-resident (standard) |
| Typical buyer profile | HNWI, investor, entrepreneur with significant foreign portfolio | Manager, professional, employee relocating for work |
| Mortgage complexity | High — requires specialist bank | Standard — resident profile post-registration |
FAQ
Flat tax and property — your questions
No. The grandfathering principle fully protects existing beneficiaries. If you opted into the regime under the €100,000 or €200,000 version, you continue at your original rate for the remainder of your 15-year window. The €300,000 rate applies only to individuals establishing Italian residency from January 1, 2026.
Yes. Unlike the pensioner 7% regime (which requires a Southern Italian municipality under 20,000), the €300k flat tax has no property location restriction. You can live and buy anywhere in Italy. The majority of buyers using this regime purchase in Milan, on the Italian lakes, in Tuscany, or on the Ligurian coast.
Under the flat tax regime, €300,000 per year — regardless of the €2M income level. Under standard Italian taxation, €2M in dividends would generate an IRPEF liability of approximately €800,000–€860,000. The effective saving is approximately €500,000–€560,000 per year. Over 15 years, the cumulative tax saving relative to standard Italian taxation would be in the range of €7M–€8M — depending on income levels and applicable tax treaties.
The regime simply stops applying from the year you lose Italian tax residency. There is no clawback of benefits already enjoyed (unlike Impatriati, which has a 2-year minimum). You would revert to standard Italian taxation (or no Italian taxation if non-resident) from the year of departure. If you have a mortgage, the lender's assessment of residency status may also change.
Yes. The prima casa purchase tax benefit (2% registration tax instead of 9%) is independent of the income tax regime you are on. If you establish Italian residency as required by the flat tax and register your primary residence at the purchased property, prima casa conditions apply to the purchase taxes. The two regimes operate on different axes — one governs income tax, the other governs property purchase tax.
Relocating to Italy under the flat tax?
Let's talk about the mortgage.
Most buyers in this profile pay cash because they assume a mortgage isn't possible. It often is — with the right bank and a properly structured file. Free 20-min call.