Is Milan becoming more attractive than London for the ultra-rich?

In the UK, the increase in taxes for non-domiciled residents – the so-called "non-doms" – is causing many ultra-rich who primarily lived in London to relocate to other cities, including Milan. Italy, compared to the UK, offers – in addition to a higher quality of life – a more favorable tax regime for particularly wealthy foreigners. These are the so-called "ultra-high-net-worth individuals" (literally "individuals with extremely high net worth"), typically having a net capital of over $30 million – as specified by Bloomberg. Understanding where these people invest is quite relevant information, as it indicates where one can expect significant real estate development. Excluding the United States, which in many ways plays in a league of its own, Milan also ranks among the top ten cities with the most second homes of the ultra-rich according to Altrata.

The arrival of international elites in the Lombardy capital has indeed had a significant impact on the city's economic fabric, especially from a real estate perspective. The distribution of wealth globally has changed a lot in recent decades, but metropolises remain the preferred place for luxury real estate investments by particularly wealthy individuals. More generally, large cities are still where these people tend to reside or buy second homes, both for cultural reasons and lifestyle. London, after New York, was one of the centers that attracted the most ultra-rich until last year, but the UK's uncertain economic prospects are undermining its status. The formal exit of England from the European Union four years ago is considered by analysts to be the main factor that has contributed to the difficulties of the British economy. For this reason, many high finance workers are leaving London, which is also losing its appeal in this field. This scenario is unsettling not only bankers but also many wealthy individuals whose investments have played a crucial role in the growth of the English capital.

Why the Ultra-Rich Now Favor Milan

As reported by WWD, an example of an investor who has shifted their focus from London to Milan is the entrepreneur who bought the historic building that will host the city's first Soho House. According to WWD, the decision to undertake such an operation in Milan was likely influenced by ongoing socio-economic changes in Europe, including the loss of relevance of the English capital, and the consequent departure of many ultra-rich from the UK. The upcoming opening in Milan of the second Italian Soho House, one of the most popular and famous private clubs in the world, is part of a broader phenomenon affecting the Lombardy capital: the culture of private clubs, traditionally British, is also taking root here, thanks to the emergence of exclusive entities such as The Wilde or Casa Cipriani – as well as Soho House itself, which will rise near Piazza San Babila. This phenomenon is a sign of how the city is becoming increasingly attractive to particularly wealthy individuals, much more so than other major urban centers historically associated with these lifestyles.

Several brands are also considering not opening their stores in London, preferring other European cities like Milan. In 2023, Via Monte Napoleone was ranked as the second most expensive shopping street in the world, with a 20% increase in rental rates compared to the previous year. However, an increasing number of economists, urban planners, and politicians are beginning to fear that, in general, major Italian cities are excessively fostering territorial inequalities: according to some experts, the attractive capacity of centers like Milan is leading to increasingly evident disparities compared to other areas of the country. The Lombardy capital alone accounts for about one-third of the total real estate investments in Italy, and grows faster than the national average, significantly outpacing the rest of the country – even the municipal transport service here has a cool Instagram account. According to this view, Milan will continue to attract more and more elites and their investments, but it will struggle to return as much value to the rest of Italy.