The Italian government has proposed introducing, effective January 1, 2027, a tax on unrealized capital gains on financial assets for high-net-worth individuals who transfer their tax residency outside the country. The rate of the so-called “exit tax” will be 26%, and the new rules will apply to investors with relevant assets valued at EUR800,000 or more.
The relevant provisions are contained in Article 17 of the draft law on Italy’s 2027 state budget, approved by the government of Prime Minister Giorgia Meloni. The document received the necessary approval from Italian President Sergio Mattarella on October 30 and was submitted to Parliament for consideration.
According to the bill, the new tax will apply to individuals who have been residents of Italy for at least six of the last ten tax years and have decided to transfer their tax residency to another country.
A mandatory condition is the possession of financial assets and property rights subject to the relevant provision, with a total value of at least EUR800,000. However, taxation will apply only in cases where, following the change in residency, Italy loses the right to tax the corresponding investment income.
The tax will be levied not on the total value of the assets, but on the accumulated gains that the investor has not yet received from their sale.
Specifically, this refers to the increase in the market value of shares, equity interests in companies, securities, and other financial instruments. To determine the tax base, the positive difference between the market value of the assets and their tax basis at acquisition will be taken into account.
For example, if an investor purchased a portfolio of securities for EUR 700,000, and at the time the tax base is determined, its value has risen to EUR 1 million, the unrealized gain will amount to EUR 300,000. At the standard rate of 26%, the tax amount will reach EUR 78,000, even if the investor has not actually sold the assets.
At the same time, a preferential regime applies to income from certain government bonds. Only 48.08% of the corresponding profit will be included in the tax base, resulting in an effective rate of approximately 12.5%.
The standard deadline for paying the exit tax is 180 days from the date the change in tax residency takes effect.
However, for individuals relocating to European Union countries or to countries with which Italy has relevant tax cooperation agreements, a payment deferral is available.
To qualify, the investor must pay an advance equal to 50% of the calculated tax and provide a financial guarantee.
When moving to another EU country, the deferral may apply for up to five tax periods, and for other countries that meet the established conditions, up to ten.
If the assets are not sold during this time, the tax liability will be extinguished, and any overpaid amounts will be refunded. Similar provisions apply in specific cases of inheritance of assets or an investor’s return to Italy.
The new system will also apply to certain types of nonprofit associations and organizations that transfer their tax residency abroad.
According to estimates by the Italian Ministry of Economy and Finance, revenue from the new tax will amount to approximately EUR3.37 million in 2027 and EUR6.74 million annually from 2028 to 2031. Starting in 2032, the net budgetary impact, taking into account the expected refund of a portion of the payments, is estimated at EUR 3.37 million per year.
Italy is effectively proposing to extend to private investors the tax mechanism applicable upon a change in tax residency, which previously applied to companies and entrepreneurs.
A similar mechanism is already in place in France, where taxation of unrealized gains upon a change in tax residency applies provided that the relevant financial assets exist and the conditions established by law are met.
The proposed changes may be significant for international investors, owners of corporate assets, and high-net-worth foreigners who use Italy as a country of long-term tax residency.
In recent years, Italy has attracted high-net-worth foreigners through a special fixed-tax regime for foreign income. For new participants in this regime, starting in 2026, the annual payment will be EUR 300,000 instead of the previous EUR 200,000.
The introduction of the exit tax may affect the tax planning of such investors, especially if they are considering relocating to another country in the future. At the same time, the procedure for applying the new provisions to participants in the special tax regime requires further legal clarification.
However, the proposed mechanism is not a general tax on departure from Italy and does not provide for the automatic levying of 26% on the value of residential real estate or an individual’s total assets.
The bill must be reviewed and approved by the Italian Parliament by the end of 2026. During the legislative process, the tax rate, the conditions for its application, and the procedure for granting deferrals may be amended.
Italy remains one of Europe’s largest real estate markets and a popular destination for international investors, particularly those considering purchasing a home in conjunction with transferring their tax residency. The proposed changes may become an additional factor in choosing a country of residence and in long-term investment planning.
Sources: Italy’s 2027–2029 Budget Bill, Article 17, approved by the government on October 28, 2026; President of Italy, official approval of the bill’s submission on October 30, 2026; Investment Migration Insider, October 31, 2026.
