The €100K Flat Tax at Lake Como: How It Works for American Buyers
Italy's Article 24-bis regime charges a fixed 100,000 EUR per year on all foreign-sourced income, regardless of amount, for up to 15 years. For a buyer with 2M or more in annual foreign income, the effective rate falls below 5%. Unlike the southern Italy 7% programme, the 100K regime has no geographic restriction. It applies at Lake Como.
The Article 24-bis Regime: Core Mechanics
The regime charges a fixed 100,000 EUR per year as a substitute tax on all income produced outside Italy, regardless of the amount of that income. Additional family members can join for 25,000 EUR per person per year. The regime covers dividends from foreign companies, interest from foreign bank accounts, capital gains from foreign securities, carry distributions from foreign funds, and rental income from properties outside Italy. Italian-sourced income is taxed at ordinary progressive Italian rates reaching 43%.
The break-even versus standard Italian rates is approximately 233,000 EUR in annual foreign income. Above that level, the fixed 100,000 EUR charge is materially cheaper. For a buyer with 3M EUR in annual foreign-sourced income, the regime produces an effective rate of 3.3%.
Why Como Is a Natural Match for This Regime
The Como buyer profile and the 100K regime align because of income level, lifestyle preferences, and geographic logic. The buyers who can consider Como at the 3M to 15M villa price point almost invariably have annual foreign income well above the 233,000 EUR break-even level. The 40 to 70% discount of Como villa pricing versus comparable Swiss lakefront is a structural arbitrage that the 100K regime makes tax-rational for income above that threshold.
The Residency Requirement
The regime requires genuine Italian tax residency: registration with the local municipality's anagrafe and spending more than 183 days per year in Italy, or demonstrating Italy as the centre of vital interests. A Lake Como villa as a summer and weekend retreat while maintaining a primary base in London or New York does not satisfy this. The Italian Revenue Agency has increased scrutiny of 100K elections where physical presence is not demonstrable.
How the Regime Differs from the Southern Italy 7%
The 7% programme is restricted to qualifying municipalities in southern Italy with under 20,000 population and charges 7% on all foreign income regardless of amount. The 100K regime is a fixed 100,000 EUR charge that applies anywhere in Italy including Como. For buyers with annual foreign income above approximately 1.4M EUR, the 100K regime is cheaper in absolute terms than the 7% rate. The full comparison is in the €100K flat tax guide.
Frequently Asked Questions
What is the difference between the €100K flat tax and the 7% southern Italy programme?
The 7% programme is restricted to southern Italian municipalities under 20,000 population. The 100K regime applies anywhere in Italy including Como. For buyers with annual foreign income above approximately 1.4M EUR, the 100K regime is cheaper in absolute terms.
What happens to the €100K election if I leave Italy before 15 years?
The election ends in the year of departure. There is no penalty for leaving early. Tax years in which the election applied are settled at the 100,000 EUR rate. Engage your Italian commercialista to handle the exit filing correctly.