Ciao bello: masters of the universe move to Milan
Why the wealthy are flocking to Milan
Goldman Sachs vice-chair Richard Gnodde, Egypt’s richest man Nassef Sawiris and CVC Capital co-founder Rolly van Rappard: Milan has assembled quite the collection of mega-rich residents in recent years.
A friendly tax regime and Milan’s dolce vita charm have lured wealthy foreigners to Italy’s second city.
The influx has accelerated over the past 12 months after the UK abolished its “non-dom” tax regime, exposing overseas assets, income and gains to UK taxes.
Italy’s tax scheme allows new foreign residents to pay a flat tax of €200,000 a year on any global income and assets for up to 15 years and avoid inheritance tax on non-Italian assets during that period.
The so-called Bel Paese has also become more attractive for private equity types who don’t adhere to the €200,000 flat tax, by levying a 26 per cent rate on most capital gains. That’s significantly better than in the UK, which recently raised taxes on carried interest — the key source of income for buyout executives — from 28 per cent to 34 per cent.
Those tax considerations have drawn thousands of people to the city, but the flood of wealthy expats has created friction. Regular folks are being pushed out of trendy neighbourhoods as property and rental prices have skyrocketed.
As of July, home prices in Milan have risen nearly 60 per cent over the past decade to €5,540 per square metre, while in Rome they have remained largely flat at about €3,600, according to data from Immobiliare.it. Rents in Milan have also surged, increasing 50 per cent in the same period from €15 to €22.50 per square metre.
The booming real estate market has brought other troubles: a corruption probe is under way in the city with prosecutors alleging a system of bribes drove some of the redevelopment.
The Milanese elite, meanwhile, have other complaints.
One banker said new arrivals at his company were on London salaries, frustrating locals who earned far less. He criticised a flurry of new members’ clubs, saying they were “not really the Italian way of doing business”. International members club Casa Cipriani launched its Milan branch in 2022 and Soho House is setting up its own outpost in the city.
A second local was rather more frank in his assessment: he dismissed the new clubs as being full of bankers and PE executives who wouldn’t make it into the city’s old-school patrician haunts.