Q: What are some of the main changes affecting foreign residents, property owners, and/or people who plan to move to Italy?
A: The Italian Government’s 2026 Draft Budget Law introduces several measures that directly affect foreign nationals relocating to Italy, international property investors, and owners of Italian real estate used for short-term rentals.
Below we outline the most significant changes and explain how they may influence tax planning, relocation strategies, and investment decisions.
1. Increases to Italy’s “New Resident” Flat Tax Regime (Art. 24-bis TUIR)
The flat tax for new residents, one of Italy’s most attractive incentives for high-net-worth individuals, is set for substantial adjustments:
- Annual substitute tax on foreign income raised from €200,000 to €300,000.
- Additional tax per qualifying family member increased from €25,000 to €50,000.
- Eligibility rules (non-residence in 9 of the prior 10 years) remain unchanged.
For individuals researching how to move to Italy for tax purposes, the increased cost may influence whether the regime remains beneficial compared with standard Italian income tax. Wealth planning structures may require another look in light of these changes.
In this article we provide more information on this tax program
2. New Tax Rules for Short-Term Rentals in Italy (Tourist Rentals like on Airbnb)
The Italian Government proposed a unified 26% substitute tax (cedolare secca) for short-term rentals, including Airbnb-style lettings. Negotiations led to a compromise:
- The previous 21% rate applies only to one property being used as a short-term rental.
- A 26% rate would apply to the second short-term rental unit.
- If you have three-plus short-term rental units, the revenue needs to be reported and taxed as business income, thus neither the 21% nor 26% flat tax would apply.
Political discussions are in progress and the final law is still evolving.
3. “Impatriati” Regime Remains Available for Workers Moving to Italy
Italy’s tax incentive for workers transferring their tax residence to Italy, the “impatriati” regime, remains substantially unchanged in the 2026 draft Budget Law.
This regime continues to offer significant tax reductions for qualified employees, freelancers, and entrepreneurs who move to Italy for work.
Foreign professionals evaluating job offers in Italy, remote workers relocating, and employers hiring international talent can still rely on this favorable option.
4. IMU Property Tax Relief for Italians Living Abroad
The draft introduces targeted IMU reductions for Italian citizens residing abroad who own property in Italy:
- 100% exemption for properties with cadastral value up to €200.
- 60% reduction for values up to €300.
- 33% reduction for values between €301 and €500.
If you want to discuss any of the above with respect to your personal tax situation, please use the link below to book a consultation.
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