Italy is proposing a new exit tax that could require wealthy residents to pay tax on investment gains they have not yet realized when transferring their tax residence abroad.

The measure appears in Article 17 of Italy’s draft 2027 budget, which was submitted to the Chamber of Deputies on October 30, 2026. If approved, it would introduce a 26% tax on certain unrealized financial gains for qualifying individuals leaving Italy, with the rules applying to losses of Italian tax residence effective from January 1, 2027.

The proposal has not yet become law and remains subject to parliamentary approval and amendment.

Who Would Be Subject to the Proposed Exit Tax?

The proposed tax would apply to individuals who meet three main conditions:

  • They have been Italian tax residents for at least six of the ten tax periods preceding their departure.
  • They hold qualifying financial assets and rights with a combined value of at least €800,000.
  • Their transfer of tax residence abroad results in Italy losing its right to tax the relevant financial gains.

The €800,000 threshold refers to the value of qualifying financial assets, including shares, equity interests, securities, and other financial instruments. It does not represent a minimum taxable gain or apply to an individual’s entire wealth.

The measure would not be limited to Italian citizens. Foreign nationals who meet the residency and investment requirements could also be affected.

How Would the 26% Exit Tax Work?

Under the proposal, qualifying individuals would be taxed on unrealized financial gains accumulated during their period of Italian tax residence, even if they have not sold the underlying investments.

The taxable amount would be calculated using the positive difference between each qualifying asset’s market value and its tax-recognized cost. The standard rate would be 26%, although government bonds would benefit from a reduced taxable base, resulting in an effective rate of approximately 12.5%.

For example, a qualifying resident holding an equity portfolio worth €2 million, with a tax-recognized acquisition cost of €1.2 million, would have an unrealized gain of €800,000. At the proposed 26% rate, the resulting tax would be €208,000.

The draft requires payment within 180 days of transferring tax residence abroad, although further clarification may be needed on how the deadline operates in practice.

Payment Deferral Would Be Available Under Certain Conditions

Individuals relocating to another EU member state or a qualifying non-EU jurisdiction with a tax cooperation agreement with Italy could request deferred payment.

However, deferral would require an upfront payment of 50% of the calculated tax and an appropriate guarantee for the remaining amount.

The proposed deferral periods are:

  • Five tax periods following the effective loss of Italian tax residence for moves within the EU.
  • Ten tax periods for moves to qualifying non-EU jurisdictions.

If the qualifying assets remain unsold throughout the applicable deferral period, the tax would no longer be due, and excess advance payments would be refunded.

The proposal also provides relief in certain circumstances involving inheritance or a return to Italian tax residence during the deferral period.

What Happens Next?

According to the technical report accompanying the draft budget, the Italian government estimates that the proposed exit tax would generate approximately €3.37 million in revenue in 2027, increasing to €6.74 million annually from 2028 through 2031.

The legislation must still pass through Parliament, where its provisions, including eligibility requirements and payment conditions, could be amended before final approval.

For wealthy individuals considering relocation from Italy, the proposal introduces a potential new tax consideration. Its final impact will depend on the legislation ultimately approved by Parliament.