Italy exit tax 2027: who pays 26% on leaving

26% on shares and funds you never sold: that is the bill Italy wants to hand departing residents from 1 January 2027. Who is caught, how much it costs, whether a December move helps and what Parliament may still change.

For years Italy has courted wealthy foreigners with a flat tax. Now it is working out what to charge them on the way out. The draft 2027 budget proposes 26% on gains that do not exist yet: the portfolio is unsold, no cash has arrived, but leaving counts as a sale. For long-term residents with a large portfolio, moving abroad could become the most expensive transaction of their lives, and one with no buyer.

Article 17 surfaced without fanfare in a 157-article text. The cabinet approved the €26 billion (about $30 billion) package on 28 October, and the bill reached the Chamber of Deputies on 30 October. It adds Article 307-bis to Italy's income tax code. Companies and sole traders have paid an exit charge for years. Private investors could simply pack and go, with no reckoning on unsold securities.

Who pays the Italy exit tax?

The tax applies only when every condition is met:

• Your tax residence ends on or after 1 January 2027.
• You were tax resident for at least six of the ten tax periods before leaving. Anyone resident since 2021 already qualifies.
• Italy loses the right to tax the income. That is the usual result for shares and most securities, because tax treaties give those gains to the new country of residence.
• Your financial assets are worth at least $900,000 (€800,000). The test looks at total value, not the gain, on the last day of the tax year before departure.

The base covers shares and company stakes, including holdings in Italian limited companies, bonds, funds, derivatives, precious metals and crypto-assets. Simple partnerships and non-commercial entities fall under the same rules. A villa in Tuscany and a million on deposit do nothing to fill the threshold. The Italian taxman is conservative here: he wants the securities, not the olive trees.

How much is the exit tax? Three examples

The tax falls on the difference between each asset's market value and its tax cost. Only the positive differences are added up: a position in loss does not reduce the gain on another.

The threshold is a cliff edge, not an allowance: an extra $20,000 in the portfolio switches on tax across the whole gain. A larger case: a $2,300,000 portfolio bought for $1,400,000 means a $900,000 gain and a $234,000 bill.

Government bonds get gentler treatment: the base is cut to 48.08%, which gives an effective 12.5%. Crypto-assets follow their ordinary rate of 33%.

When is it due and how does deferral work?

The harder question is not how much but where the money comes from: tax on unsold securities has to be paid from other funds or by selling part of the portfolio.

In the larger example above, deferral needs $117,000 at once. There is good news too. If an asset stays unsold until the deferral ends, the tax on it lapses and any excess is refunded. The same applies on inheritance and on returning to Italy. If the price falls, you pay on the smaller gain, while gifts to relatives do not cancel the bill: they are taxed on the gain at departure.

The bill does not list the qualifying non-EU countries, so Switzerland, the UK and the UAE sit in limbo, and that decides whether you defer half or pay everything within six months. A ministerial decree will set the form of the guarantee.

Does leaving before the end of 2026 help?

Do not book the 30 December flight just yet. What matters is the date your tax residence ends, not moving day. Italy generally decides residence for the whole year, based on where you spent most of it. Someone leaving in autumn 2026 most likely stays resident for all of 2026, so residence ends on 1 January 2027, the first day of the new tax.

Tax treaties and split-year rules can change that outcome, so the sums have to be run for a specific country and date. Our guide to the 183-day rule covers how the days are counted. Italian citizens moving to low-tax jurisdictions also stay presumed resident until they prove otherwise.

What happens to flat-tax residents?

This is the big open question for foreigners. Since 1 January 2026 new residents have paid a fixed €300,000 (about $340,000) a year on foreign income, up from €200,000 (about $230,000), for up to 15 years. The bill says nothing about them: someone who arrived in 2021 formally passes the six-of-ten test and could face the new tax on leaving in 2027. It is equally silent on the 7% regime for foreign pensioners.

The second problem: the base runs from purchase cost, so gains built up before arriving in Italy could be caught. In other words, a country you reached with a ready-made portfolio could tax growth that happened long before you met.

The government's arithmetic is modest. The bill's technical report expects €3.37 million (about $3,800,000) in 2027 and €6.74 million (about $7,600,000) a year from 2028 to 2031. The 2027 figure equals the annual payments of about 11 flat-tax residents.

Meanwhile the inflow continues. Official figures show Italy's investor visa drew 279 applications between 1 January and 13 October 2026, more than in any full year, with 160 from US citizens. Anyone applying for Italian residence now is at least six years away from the tax, but recording asset values at arrival is a job for the first month.

Could the exit tax change before it passes?

It could, and the conversation has started. Parliament normally approves the budget by the end of December. On 5 November Deputy Economy Minister Maurizio Leo said Italy is ready to consider proposals to improve the tax. The same day Stefania Craxi, who leads the Forza Italia senators, set out three amendments her party will seek:

• tax only growth accrued in Italy, using the value on arrival, as already happens for companies;
• keep the promise made to those who chose the new residents regime;
• drop the 50% advance and the guarantee for moves within the EU.

The third point rests on precedent: in 2004, in Case C-9/02, the EU Court of Justice held that France's exit tax infringed freedom of establishment and treated a mandatory guarantee for deferral as a restriction in its own right. The coming weeks will show how keen Rome is to argue with its own lawyers and Luxembourg at once. Italy votes in 2027, so this is the government's last budget.

How do other countries tax leavers?

Italy is not inventing anything: the six-of-ten test and the €800,000 figure come from France, though the French version is milder.

What to do before leaving Italy

• Count your residence years and test the threshold. List financial assets separately from everything outside the threshold. A $20,000 difference here can be worth six figures.
• Gather proof of cost. Broker statements, contracts and evidence of value at arrival. The discipline is the same as for proving source of funds.
• Choose the country with deferral in mind. Within the EU you pay half, outside the list you pay it all. Cyprus and Malta give five periods of deferral, while the UAE depends on the future list.
• Time your sales. A loss at departure does not reduce the tax, so the order of transactions before you leave needs working out in advance.
• Review your structure. A stake in an Italian limited company is in scope with no carve-out for an operating business, so review your company structure before departure, not after.

If you have not chosen a country yet, start by comparing tax systems and residence by investment. A backup passport outside Europe, such as Paraguay, solves a different problem but also ends your dependence on one country.

Our tax and relocation services for Italy

We handle the whole departure, from calculating the tax to your status in the new country.

For new arrivals we also arrange the digital nomad visa and residence, and every programme is on the Italy overview. Weighing up a city? Start with our guides to Milan and Rome.

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