Next to LùBar, my boyfriend’s restaurant in central Milan, a once vacant building has been transformed into the marble-covered, five-story Casa Cipriani, a hotel, restaurant, and members’ club. Ferraris sit parked on the sidewalk out front, and security guards in dark suits stand by the entrance, while women in hijabs carrying Prada and Gucci shopping bags stop in for $10 cappuccinos.
The scene on Via Palestro has become a microcosm of the city as a whole, where foreigners—especially ones with cash to spare—are ubiquitous. And prices have followed suit. Finding a one-bedroom apartment to rent in the city center for less than $1,700 a month has become a challenge. The Loreto neighborhood, at one time considered shoddy, has now been nicknamed “Nolo” (North of Loreto) and is attracting pseudo-hipsters who buy lofts. Real-estate costs have risen by 40 percent since 2018, while average rent has increased by 20 percent in the last two years alone.
A large part of what’s driving this change is a $109,000-a-year maximum flat tax for foreigners. This policy applies even to the highest earners, such as soccer players who make millions every year for teams like Inter Milan or A.C. Milan, and billionaires who would otherwise be paying hundreds of millions in taxes elsewhere in Europe. As a result, 2,000 high-net-worth newcomers have established residency in Milan since the measure was introduced, in 2016.
For many foreigners, the move to Milan makes sense. Following the Expo fair in 2015, the city has thrived, shedding its reputation as a close-knit preserve for the local bourgeoisie. And unlike other Italian cities, which run on the backs of tourists, it has a booming industrial sector, functioning infrastructure, and an increasingly eclectic, international crowd, fostered by its reputation as a fashion-and-design hub.
These recent Milan transplants rent central apartments, eat at Nobu—where lunch now costs $140, in a city where people are used to subsisting on $5.50 panini—and jet off in private planes.
Feelings in Milan are mixed. At dinners, sciure, the city’s well-to-do ladies, love to speculate on who’ll move there next. (At one point, rumors swirled about L.V.M.H. founder Bernard Arnault.) Others complain about the rising rent and other living costs in the city.
Yet more millionaires and billionaires are likely to move soon, with France’s left-wing New Popular Front coalition threatening a 90 percent tax bracket on yearly incomes of more than $435,000. In the U.K., meanwhile, the new Labour Party prime minister Keir Starmer’s proposition to scrap “non-dom” tax regimes, which allow non-domiciled people to pay only U.K. tax on U.K. earnings, is causing apprehension among the wealthier class. An estimated 9,500 millionaires are expected to leave the U.K. this year, according to Henley & Partners, an investment-migration consultancy, making its millionaire drain second only to China’s.
For many, the move is a logical one. A wealth manager for J. P. Morgan explains, “People are looking for balance between quality of life and economic incentive. Milan is centrally located, near Lake Como, near Switzerland. It’s a great city to live and work in.”
They rent central apartments, eat at Nobu—where lunch now costs $140, in a city where people are used to subsisting on $5.50 panini—and jet off in private planes.
Milan isn’t the only European city attracting foreigners. With a Trump presidential victory looking surer by the day, U.S. citizens are buying into golden-visa programs—immigration schemes where individuals can obtain residency in a country by making significant investments into that country’s economy—in Greece, Portugal, and Spain. (Spain and Portugal have recently removed real estate from their qualifying criteria for the program due to skyrocketing rental prices in urban areas, while the Netherlands discontinued its golden-visa program last year after its high price point made it unpopular.)
Stateside, Americans are increasingly moving between states in search of lower taxes. One hundred thousand people moved out of California to Texas in 2022 alone, with Austin’s “Silicon Hills” now an enviable tech hub to rival Silicon Valley. Meanwhile, across the country, half a million New Yorkers have left the state, mostly migrating to Florida. The atmosphere is often fraught as a result—competition among the rich there is so fierce that being a member of a golf club can cost you upward of seven figures. (In April, the New York Post called it a “luxury golf arms race.”)
Suddenly, it feels like the entire 1 percent is planning an imminent move. Are we experiencing a great migration of the rich?
The numbers would suggest so. In 2013, Henley & Partners reported that the migration of high-net-worth individuals had risen to 51,000 people per year. This year, that figure is expected to reach 128,000.
And it isn’t just in the West. Asia’s and the Middle East’s rich are moving to the U.A.E., a desert tax haven where residents pay no income tax, en masse.
Last year alone, 4,500 millionaires relocated there. And the country is practically built to accommodate them—there are more than 150 international schools and countless sparkling new apartments in skyscrapers overlooking the Persian Gulf. Last year, the lyrics of Russia’s No. 1 hit song read, “I’m in Dubai, I’m chilling…. Yeah, I’m rich, and I don’t hide it.”
Istanbul, known for its low corporate- and property-tax rates, has been attracting wealthy Russians and entrepreneurs from Kazakhstan and Azerbaijan, too, but also Indians, who began charting their escape route when Narendra Modi raised taxes for citizens earning more than $119,000 a year, and today take over sumptuous palaces and throw parties on the Bosphorus.
A few miles west, with turmoil in the Middle East, many wealthy Lebanese and Egyptians are buying up homes on the Athens Riviera, where decrepit villas once belonging to the likes of Maria Callas and Aristotle Onassis are being demolished to make room for high-rise apartments. “They love the weather, the lifestyle, the safety that Greece can offer,” Minas Dimos, the owner of Plasis, a real-estate-and-development company in the area, told the Financial Times. Beachfront properties are going for as much as $1,500 per square foot.
A key aspect of this great migration is the sheer number of millionaires in the world, which has risen by 50 percent over the last decade, and is projected to rise another 40 percent in the next five years, according to a Credit Suisse report.
And then there’s the normalization of tax avoidance. Gone are the days of hiding wealth away in the Cayman Islands, or putting money in a suitcase and crossing European borders into Switzerland. “I feel like the biggest difference is that people used to hide the fact they were moving to save money. It was shameful,” a recent Milan transplant tells me. “Now I think it’s totally normal. ”
“No one is embarrassed by saying, You know, I’m in the U.A.E., going to the beach every day, but also saving a ton of money,” another person says.
It’s telling that the only tax haven which seems to be losing its popularity is Monte Carlo, where endless construction and virtually nonexistent housing laws—renters have almost no rights despite paying exorbitant sums—are driving its residents away to Italy and Switzerland.
After all, who wants to live in a tax haven which is just a tax haven? As it turns out, you can have your cake and eat it, too.
Elena Clavarino is a Senior Editor at AIR MAIL
