British Expats in Italy
Brits are part of around 5.3 million foreign residents living in Italy, making up 8.8 percent of the country’s total population of just under 60 million, the most recent data from Italian statistics office Istat shows. It is estimated that over 34,000 Brits live in Italy according to stats from the BBC.
British Expats in Italy Face Massive Wealth Tax Bill
Over 30,000 Brits face a tenfold increase in wealth tax bills in overseas properties duties imposed by Italy.
Brits living in Italy will be hit by a wealth tax on their UK and overseas properties under new Italian rules post-Brexit. The rules came out in 2012 and may cost Brits tens or hundreds of thousands of pounds.
Italian tax law states that all Italian residents must pay a 0.76% annual levy on the value of overseas properties.
A 1,000,000 pound UK house would attract 7,600 pounds in annual tax in Euros.
For years a quirk in the continental rule book meant the Italian tax authority calculated thse bills using Britain’s outdated council tax system, which uses property valuations dating back to the 90s.
But, due to Brexit, the new rules mean there will be an annual wealth tax imposed based on the properties true modern day market value, now Britain is no longer part of the European Union.
A UK property in council tax band G worth 240,000 pounds in 1991 is now valued at 3.25 million pounds today, which would attract a 24,700 pound annual tax payable in euros.
Italy have been trying to entice Britons to live in the UK including schemes offering the chance to buy up properties that need renovation for as little as 1 EUR and offering Brits only a 7% income tax on their UK or foreign pension schemes.
Italy was also becoming popular for non-doms, wealthy people who move from country to country for tax purposes.
The new rules in Italy mean paying an annual wealth tax.
The average house price in London is £516,285 or nearly 4,000 gbp per year due in wealth tax in Italy payable in euros.
Relatively new laws allow non-doms to pay a one-off 100,000 euros per year flat rate tax for a period of 15 years.
Other options include selling your UK properties or moving back to the UK or paying the annual tax.