Rents for luxury properties in Milan have surged dramatically as the UK’s non-dom tax changes prompt a wave of wealthy internationals to leave London. The increased demand has caused prime rental prices in Italy’s business capital to climb by around 10% year-on-year, with rental transactions in the high-end market up by 30%, according to real estate experts.
The Impact of UK’s Non-Dom Tax Reforms
The exodus follows announcements by the UK Government to scrap the non-domicile tax regime, which previously allowed wealthy internationals to pay taxes only on money brought into Britain. The Labour Party has pledged further crackdowns on loopholes, including inheritance tax benefits for non-doms, set to take effect in April 2025.
In contrast, Italy’s flat-tax system, introduced in 2017, has made it an attractive alternative for high-net-worth individuals. Despite a recent increase in the flat tax from €100,000 to €200,000, it remains significantly cheaper for the global elite compared to the UK’s new tax regime.
Milan: A Rising Hub for Relocators
Real estate specialists are witnessing an unprecedented shift in demand. Diletta Giorgolo Spinola, of Sotheby’s International Realty, said, “We are overwhelmed by the influx of international buyers relocating from London.”
Luxury rental prices in Milan’s top market segment have risen to €7-€7.5 per square meter, compared to €6.6 last year, with some properties renting for between €15,000 to €30,000 per month. Families and individuals relocating to Milan often rent initially before buying properties, with purchase budgets ranging from €5m to €10m.
“Milan’s appeal lies in its connectivity to Europe, international schools, and proximity to the lakes, Alps, and the coast,” added Jelena Cvjetkovic, director at Savills’ international residential network.
A Rapidly Moving Market
With demand outpacing supply, the Milan rental market has become highly competitive. Transactions now occur swiftly, with renters often closing deals the same day they view a property. “The market is very fast-paced, driven by relocators from London,” noted Ms. Giorgolo Spinola.
Milan’s transformation from a second-home destination to a relocation hotspot signifies a broader shift in global wealth trends, with London’s financial appeal waning in light of stricter tax policies.
Rome and Beyond
While international interest has also grown in Rome, Milan remains the epicenter of the change due to its financial importance and connectivity. For some wealthy relocators, trophy homes near Lake Como or the Italian Riviera are also gaining popularity.
Leave a Reply