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Dear reader, 

Greetings from Milan. As a regular visitor to London, I have noticed how glum the mood has become. The strikes and shrinking economy are just a couple of reasons. The capital of Lombardy has a much more buoyant vibe. One reason? Milan is the beneficiary of a post-Brexit banker bonanza. 

There are certainly a lot more high-rollers in town. Brexit has cost London 7,000 people across financial services companies, according to a report compiled by EY last year. The number of bankers in European financial centres earning more than €1mn rose by 738, or 41 per cent, in 2021 compared with the year before, according to the European Banking Authority. Italy alone accounts for 29 per cent of the increase, which means that the number of people traipsing around Milan with a seven-figure pay cheque burning a hole in their pocket has almost doubled to 351. 

These will not all be Brexit exiles, of course. Some of the new millionaires might be local bankers doing (even) better for themselves. But, anecdotally, lots of former Londoners are now living la dolce vita. A good number will be Italians — perhaps those who were working with Italian companies in London — coming home.

Not all of them, though. Goldman Sachs, for example, has created thematic hubs in European financial centres. The energy one is in Milan. 

Once upon a time, the move from London to Milan would have been a tough one for non-Italians. The city was austere, unfriendly and ill-equipped to receive international residents, with not an English bookshop or an original-language movie in sight. It has now changed — a lot. Indeed, a footloose and fancy-free banker doing a cost-benefit analysis of Europe’s financial centres might find Milan near the top of the list. 

Is it the risotto? The fashion? The driving distance to Portofino and St Moritz? That’s all part of the package. But the biggest attraction appears to be the taxes, or lack thereof. The maximum tax rate for those moving to Italy is 13 per cent for the first five years, and 22 per cent for the subsequent five.

Bar chart of central apartment rents ($'000s, pcm) showing Milan compares well on rental costs

Palermo is an even better bet tax-wise, though inconveniently located. It has a 4.5 per cent tax rate. And if you fall in love with the concept of the big Italian famiglia, well, that’s all to the good too. If you have three children under the age of 18, your tax rate falls to 4.5 per cent, wherever you choose to live. 

That’s worth looking at if you are earning a high salary. And if you’ve made your money already, Italy also has a place for you. Under the local equivalent of the UK’s non-dom scheme — which also applies to Italians who have been living abroad for at least nine years — taxes on income outside Italy are a flat €100 000 a year. Footballer Cristiano Ronaldo apparently thought this was worth his while. 

These tax breaks — affectionately known as “svuota-Londra” — are having their intended effect. Using the latest available figures and projecting the trend forward, there may now be 2,000 immigrants benefiting from the lower income tax regime, according to Marco Cerrato, partner at tax company Maisto e Associati. And Italy’s non-doms generated almost €100mn of taxable income in Italy, as well as spending heaps of money.

That’s showing up in higher real estate prices. The price of luxury homes in Milan is up 25 per cent in the past six months, according to a Bloomberg report. International schools crop up at every street corner. The influx of wealthy individuals is also causing a change in the fabric of the place. Members’ clubs, previously unknown, are mushrooming. Casa Cipriani, named after the eponymous Venetian hotel, is a €4,000-a-year opportunity to see and be seen, and is a particular favourite with Milanese ladies who lunch. The Core Club, which reportedly charges €10,000 a year, has opened a Milan branch. 

It is not all good news, of course. Inflation, especially for high-end goods and services, is a concern. And the influx of bankers means that conversations at dinner parties in central Milan now overwhelmingly centre on the scarcity of €4mn apartments, or how hard it is to find good help.

But, still, the change should be welcomed. When I moved back to Milan from London, many moons ago, it was a staid, closed place. Workplace friendships, a given in London, were unheard of. Meeting anyone new was a challenge. A new, more cosmopolitan culture, plus the opportunities from a growing economy, now make Milan friendlier and more varied than I ever thought possible. 

Ciao,

Camilla Palladino
Lex writer

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