Italy’s Low Inheritance Tax Is Costing the Economy Dearly, Economists Warn

Italy’s lenient inheritance tax regime is coming at a major economic cost, according to leading economists.

The country’s longest-running TV quiz show, The Inheritance, offers generous cash prizes—a name that reflects how strongly Italians view inheritance as the ideal route to wealth. Analysts say this cultural mindset is one reason Rome continues to impose some of the lowest inheritance taxes in the developed world.

A study by economists Salvatore Morelli and Demetrio Guzzardi, based on data from the Stone Center on Socio-Economic Inequality in New York, estimates that inherited wealth in Italy reached nearly €243 billion in 2024—about 14% of national output.

According to Giacomo Gabbuti, an economic historian at Sant’Anna School of Advanced Studies in Pisa, the share of inherited wealth has doubled in the last 30 years and is now at its highest level since the late 19th century.

Although Italy’s figure is unusually high, the broader trend mirrors shifts in other advanced economies, where the wartime “baby boomer” generation accumulated large asset pools that are now being passed down.

Yet Italy taxes inherited wealth at an average rate of less than 0.5%—around one-third of the global average—with large fortunes taxed particularly lightly.

Low inheritance tax, low mobility

Morelli, now a professor at Roma Tre University and head of CUNY’s Graduate Center Wealth Project, argues that Italy’s minimal inheritance tax “undermines social mobility and preserves privilege across generations.”

Many of Italy’s richest citizens did not build their fortunes themselves. A UBS report shows that of Italy’s 62 billionaires last year, only 42% were self-made—one of the lowest shares in Europe.

Italy’s wealthiest individual, Giovanni Ferrero, inherited much of his stake in the Ferrero Group—maker of Nutella—from his father in 2015. Forbes values his net worth at around $41 billion.

This intergenerational concentration of wealth is nothing new. Research by the Bank of Italy found that families in the top third of wealth in Renaissance Florence in 1427 were 50% more likely to still be in the top third nearly 600 years later, despite centuries of wars, plagues, and political upheaval.

The widely discussed study had little impact on policy.

Italy collects just €1 billion annually from inheritance taxes—far below Germany and the UK (about €9 billion each) and France (€21 billion). Italy’s average rate is below 0.5%, compared with 2% in Germany, 2.9% in the UK, and 7.5% in France. The U.S. average is 1.3%.

Morelli notes that only 30% of Italy’s inheritance tax revenue comes from estates above €1 million.

Economists estimate Italy could earn an additional €6 billion annually by raising inheritance taxes to the EU average.

Meloni government firmly against changes

Economist Tito Boeri of Bocconi University argues that the lost revenue could strengthen education and childcare—key levers for growth and equality. Others say the funds could help Prime Minister Giorgia Meloni reduce labor taxes for lower-income households, boosting domestic demand.

But Meloni’s right-wing administration strongly opposes higher taxes on wealthy Italians. The prime minister recently wrote on X:
“Leftists keep proposing wealth taxes; reassuringly, they’ll never be implemented while the right is in power.”

Tax resistance runs deep in Italy, where trust in government is low and public services often lag behind EU standards.

In 2001, then–Prime Minister Silvio Berlusconi abolished the inheritance tax entirely; a later government reinstated it at much lower levels. Meloni’s 2022 reforms made it easier for wealthy citizens to transfer assets to heirs during their lifetime, further reducing potential tax liabilities.

A system that favors the wealthy

Italy allows spouses and children to inherit up to €1 million tax-free, after which a 4% tax applies. Other heirs face rates up to 8%, with far smaller exemptions.

France and Germany have lower exemptions and top rates as high as 60%.

Critics of higher inheritance taxes argue that Italy already has high taxes overall and fear that further increases could dampen growth or drive wealthy Italians abroad.

But new research shows the top 7% of Italian earners currently pay proportionally less tax than the lower and middle classes. Wealthy households also benefit from low taxes on real estate and financial assets and from favorable flat-tax regimes for the self-employed—while salaried workers bear heavier burdens.

Gabbuti says France and Germany show that higher inheritance taxes pose minimal economic risk.
“The eurozone’s two largest economies tax inheritances far more heavily without driving away the rich or harming growth,” he notes.