UK Election: Will There Be an Exodus of Wealthy British Expats?
Back in June, investment migration firm Henley Global estimated that there could be a net loss of 9,500 millionaires from the UK in 2024 – and that was before the general election. Given Labour’s landslide victory, alongside rumours of tax increases, could these projected numbers be set to rise?
Henley Global told the press that around 4,200 High Net Worth individuals left the UK last year, double the numbers leaving in 2022 (HNW is defined as individuals with liquid investable wealth of USD 1 million or more.) This new forecast doubles that number and puts the UK second in the highest outflow of HNWs, after China – so where are they going?
The Henley Private Wealth Migration Report 2024 indicates that the UAE is the top choice for wealthy expats, in particular, Dubai. The region is popular because of job opportunities but also its climate, golden visas and, of course, no income tax. Around 6,700 millionaires are set to enter the UAE in 2024, followed by the USA, with an anticipated increase of 3,700. Singapore, Canada and Australia come next, followed by Italy, Switzerland, Greece, Portugal and Japan (however, check out our International Healthcare Update for a caveat about the cost of health insurance in the UAE and its impact).
Portugal Proves Appealing to Wealthy Expats
We’ve just mentioned Portugal in the light of Henley Global’s latest report, but the country also features in a new survey, too – the ‘Wealthy Expats in Portugal Survey Report 2024/25’ from the World Digital Foundation. They told the press that:
“Portugal has seen a meteoric rise over the last 10 years in terms of attracting affluent families and investors, and the country … is really punching above its weight with international people looking for a safer landing place for life as well as their wealth, income and assets.’’
An update in the country’s Golden Visa program is likely to boost the nation’s appeal even further, with the possibility of applying for permanent citizenship after 5 years. The luxury property market around Lisbon and the Algarve is also proving to be a draw. Low rates of crime and enticing tax options have also enhanced the country’s attractiveness to wealthy expats.
Expat Insider 2024 Survey Cites Vietnam as ‘Most Affordable Country’
The Expat Insider survey for 2024 has now been released, and Vietnam scores the top slot of 53 destinations in terms of affordability. Its scores in other areas – such as quality of life – are much lower, but it’s certainly cheap. The top ten list is as follows:
- Vietnam
- Colombia
- Indonesia
- Panama
- Philippines
- India
- Mexico
- Thailand
- Brazil
- China
Part of this scoring relates to housing: it’s cheap and easy to find in many of these countries. InterNations says that over four in five expats in Vietnam (86%) rate the cost of living favourably, and half (50%) rate it as very good (compared to a global average of 40% and 12%, respectively). It’s noticeable that Asia dominates this particular list, but the most expensive country ranked is Canada: even though inflation rates have slowed, the survey reveals that over half of respondents (53%) say that they find that their disposable household income isn’t enough to allow them to lead a comfortable life.
Mortgage News for Expats
Specialist lender Hampshire Trust Bank (HTB) says that it will be cutting selected five-year fixed rates by up to 0.7% from late August and will be offering two five-year fixed products in its Early Redemption Charge range. HTB offers products to buy-to-let landlords, expats and foreign nationals, so if you’re abroad but looking to invest in property in the UK, it might be worth getting in touch.
Molo Finance are offering a range of products, too, which include specialist mortgages for multi-unit freehold blocks, HMOs, holiday lets and investor-led properties. They’re offering reductions from 4.45% for a two-year fixed rate and 5.06% for a five-year fixed rate. If you’re an expat buyer, they’re offering reduced rates for two and five-year fixed BTL products (4.99% for capital and interest mortgages and 5.74% for interest-only mortgages, both at a 70% LTV).
Meanwhile, the UK press this summer has been promoting the Spanish city of Barcelona as an ‘expat magnet,’ after an analysis by Compare My Move. The comparison site says that
“Barcelona tops Madrid by 0.5 per cent to be the most popular city for British movers to Spain despite Madrid being the larger city and country’s capital.”
Mortgage rates in the city are 2% lower than in the UK, and Barcelona has a high percentage of British expats, followed by Madrid and Alicante. The survey by Compare My Move also shows the most popular countries for UK expats: Spain, France, Italy, Ireland and Germany are currently the most popular destinations for emigrating UK nationals, so even post-Brexit, the EU still tops the list for Brits wanting to move abroad.
Italy: Tax Is Doubled on Foreign Income for New Residents
The Meloni government is attempting to address locals’ concerns about property price hikes by doubling a flat tax on new residents’ foreign income, the Italian press announced in mid August. From now on, new residents will see a rise to €200,000 in the annual levy on overseas income. The Financial Times reports that this should still make the country appealing to billionaires, whilst hopefully placating locals who are protesting against the 43% rise in Milanese property prices, for example. Private equity managers have flocked to Milan out of London in recent years, such as Capstone Investment Advisors, Eisler Capital, and Point72 Asset Management.
Property experts say that Italy should still be appealing to wealthy UK expats seeking to leave Britain after the new Labour government’s pledge to abolish non-dom status. But wealth managers urge caution in the wake of Italy’s new fiscal decision and instability in French tax legislation, too. They say that ‘fiscal sweeteners’ can be subject to the winds of political change.