Article 11 of the Budget Law for 2026 (draft version dated 18th October) provides for an increase in the substitute tax applicable to individuals opting for the special tax regime under Article 24-bis of the Italian Income Tax Code (TUIR). Grandfathering rule is granted: The new provisions will not apply to individuals who already benefit from the aforementioned tax regime. Similarly the new rule will not be applicable to those who have transferred their habitual abode to Italy prior to the entry into force of the new law.
According to the proposed amendment, the annual tax due is expected to rise from annual EUR 200,000 to EUR 300,000 for the main applicant, and from EUR 25,000 to EUR 50,000 for each qualifying family member.
This provision is expected to apply only to individuals who transfer their residence to Italy for civil law purposes – namely their habitual abode – after the entry into force of the law (presumably as of 1 January 2026).
As also established in the practice of the Italian Tax Authorities (i.e. Circular Letters), the Italian Supreme Court (Corte di Cassazione) has ruled that the requirement of the “habitual abode” does not imply continuity or permanence. The requirement could be considered as met even if the individual works, or carries out other activities in a different Municipalities, provided that they maintain a dwelling there, return whenever possible, and demonstrate the intention to preserve it as the center of their family and social relations. As this is a delicate item, we recommend to contact your advisor at Belluzzo International Partners for further comments.
