Tuscany, Italy (Credit: iStock)
The number of ultra-wealthy taking up residency in Italy may surge this year.
The influx of high-net-worth individuals is due to a new tax program for residents, Bloomberg reports. Known as the “New Resident Regime,” which the Italian government introduced in 2017, foreigners who establish a residence in the country can cap their income tax on worldwide income at €100,000, or US$114,000.
Establishing a residence entails buying or renting a home, without a minimum investment required — a key difference to countries like the U.S., where a so-called investor visa requires parties to lay down a minimum of $500,000.
As a result, the number of Italian residency applicants is expected to increase “significantly in 2019” from 150 last year, according to Knight Frank partner Kate Everett-Allen.
Everett-Allen told Bloomberg that her firm has worked with foreign investors representing “over 93 nationalities seeking Italian property.” The upticks comes as the country’s residential market is recovering from a 40 percent decline in prices during the 2007-2013 period, she added.
Investors who participate in the program avoid Italy’s progressive income tax on income from outside the country. Wealthy Chinese investors were among the first batch of approved applicants to the residency program, real estate agents said.
Property-seeking investors from China and Hong Kong are particularly interested in wine estates in the central region of Italy, according to Riccardo Romolini, chief executive officer of Agenzia Romolini, an affiliate of Christie’s International Real Estate. Romolini said areas popular among foreign investors include Tuscany as well as Chianti, Brunello di Montalcino and Umbria.
He told Bloomberg that interest in Italian real estate “is part of a growing trend for Asian investors wanting to diversify their portfolio in more varied locations due to constraints back home.” [Bloomberg] – Mike Seemuth