Last month, the UK ended its non-domiciled tax regime. This change had been announced in 2024, but its effective date was April 2025. The way this program worked was that if you lived in the UK but were "domiciled" somewhere else, you could limit the amount of taxes that you had to pay in the UK.

Only income and gains earned in the UK and foreign income and gains brought into the UK were taxed. If foreign income stayed abroad, it was not taxed. There was still an annual charge for long-term residents of the UK, but at a high level, this is how the tax regime worked.

The advantage for a rich people is that they could decide to reside in the UK because, hey, London is pretty cool, but at the same time they could nominate a lower-tax country as their domicile. For non-rich people, this became a controversial program, and so it was swapped for tax regime based on residency.

The reason I mention this is because it seems to be having a direct impact on Milan's real estate market. Since 2017, Italy has had a flat tax regime that allows new residents to pay a fixed annual tax rate of €200,000, regardless of how much money they earn abroad.

This has proven to be attractive among rich people and, between 2017 to 2022, the program attracted 2,730 individuals according to the Financial Times. But then the UK made its change and so Italy decided to colloquially rebrand its program to "svuota Londra", which translates to "empty London" in Italian.

It became about taking direct advantage of what the UK had done. And it seems to be working even better. In 2024, approximately 2,200 high-net-worth individuals relocated from the UK to Italy

Over the weekend, Warren Buffett and his team hosted some 40,000 people in Omaha for Berkshire Hathaway's annual shareholder meeting. And during the event the 94-year-old announced that he would be retiring at the end of the year. This is after 55 years as CEO, which makes him the longest-serving chief executive of an S&P 500 company.

What a run. Thanks for all the wisdom that you have shared over the years, Warren. In honor of this milestone, I decided to go back and reread his last shareholder letter (which was published back in February). His comments on the insurance industry are particularly interesting, and naturally relevant to real estate.

Over the decades, Warren has talked a lot about the benefits of owning insurance companies, namely the "money-up-front, loss-payments-later" model. It creates a "float" of cash that can be invested in the interim. But the flip side of this benefit is that it can sometimes conceal a shitty business.

As a business, if you have to pay your costs up front before you sell your products or services, then it's pretty easy to determine if you're not making any money. But in insurance, there's a long-tail of liabilities that can be far more insidious and that may not appear for many years, or even decades according to Warren.

There's also climate change bringing more uncertainty:

In general, property-casualty (“P/C”) insurance pricing strengthened during 2024, reflecting a major increase in damage from convective storms. Climate change may have been announcing its arrival. However, no “monster” event occurred during 2024. Someday, any day, a truly staggering insurance loss will occur – and there is no guarantee that there will be only one per annum.

Think back only 135 years when the world had no autos, trucks or airplanes. Now there are 300 million vehicles in the U.S. alone, a massive fleet causing huge damage daily. Property damage arising from hurricanes, tornadoes and wildfires is massive, growing and increasingly unpredictable in their patterns and eventual costs.

In a perverse way, all of this is good for the insurance business. More economic risk means higher premiums and a greater overall need for insurance products. But you have to accurately underwrite this risk:

Last month, the UK ended its non-domiciled tax regime. This change had been announced in 2024, but its effective date was April 2025. The way this program worked was that if you lived in the UK but were "domiciled" somewhere else, you could limit the amount of taxes that you had to pay in the UK.

Only income and gains earned in the UK and foreign income and gains brought into the UK were taxed. If foreign income stayed abroad, it was not taxed. There was still an annual charge for long-term residents of the UK, but at a high level, this is how the tax regime worked.

The advantage for a rich people is that they could decide to reside in the UK because, hey, London is pretty cool, but at the same time they could nominate a lower-tax country as their domicile. For non-rich people, this became a controversial program, and so it was swapped for tax regime based on residency.

The reason I mention this is because it seems to be having a direct impact on Milan's real estate market. Since 2017, Italy has had a flat tax regime that allows new residents to pay a fixed annual tax rate of €200,000, regardless of how much money they earn abroad.

This has proven to be attractive among rich people and, between 2017 to 2022, the program attracted 2,730 individuals according to the Financial Times. But then the UK made its change and so Italy decided to colloquially rebrand its program to "svuota Londra", which translates to "empty London" in Italian.

It became about taking direct advantage of what the UK had done. And it seems to be working even better. In 2024, approximately 2,200 high-net-worth individuals relocated from the UK to Italy

Over the weekend, Warren Buffett and his team hosted some 40,000 people in Omaha for Berkshire Hathaway's annual shareholder meeting. And during the event the 94-year-old announced that he would be retiring at the end of the year. This is after 55 years as CEO, which makes him the longest-serving chief executive of an S&P 500 company.

What a run. Thanks for all the wisdom that you have shared over the years, Warren. In honor of this milestone, I decided to go back and reread his last shareholder letter (which was published back in February). His comments on the insurance industry are particularly interesting, and naturally relevant to real estate.

Over the decades, Warren has talked a lot about the benefits of owning insurance companies, namely the "money-up-front, loss-payments-later" model. It creates a "float" of cash that can be invested in the interim. But the flip side of this benefit is that it can sometimes conceal a shitty business.

As a business, if you have to pay your costs up front before you sell your products or services, then it's pretty easy to determine if you're not making any money. But in insurance, there's a long-tail of liabilities that can be far more insidious and that may not appear for many years, or even decades according to Warren.

There's also climate change bringing more uncertainty:

In general, property-casualty (“P/C”) insurance pricing strengthened during 2024, reflecting a major increase in damage from convective storms. Climate change may have been announcing its arrival. However, no “monster” event occurred during 2024. Someday, any day, a truly staggering insurance loss will occur – and there is no guarantee that there will be only one per annum.

Think back only 135 years when the world had no autos, trucks or airplanes. Now there are 300 million vehicles in the U.S. alone, a massive fleet causing huge damage daily. Property damage arising from hurricanes, tornadoes and wildfires is massive, growing and increasingly unpredictable in their patterns and eventual costs.

In a perverse way, all of this is good for the insurance business. More economic risk means higher premiums and a greater overall need for insurance products. But you have to accurately underwrite this risk: