Abu Dhabi Aims to Attract Wealthy Expats
The Emirate is currently investing an estimated US$10 billion in the state to attract wealthy expats, according to recent reports. The Guggenheim is being constructed at the moment, along with high-end seaside villas and extensive residential districts, which according to the press are being bought by investors from the UK, Spain and India, among other nationalities. The British currently hold the top spot for property purchases.
Royal family member Sultan Sooud Al Qassemi told the Economic Times of India that:
“Abu Dhabi is trying to position itself as a global hub, not just a regional hub. It’s building the physical infrastructure that goes with its global ambition as the capital of a country that’s punching above its weight not just economically, but also politically and culturally.”
The region faces some challenges, most notably that of climate change, but the Emirate is attempting to position itself as a serious local contender and its rate of growth does not yet appear to be slowing down.
British Pensions to Rise
UK pensions are due to rise by around £400 next year, and this could prove beneficial to some British expats, along with the winter fuel payment. Although the new Labour government are tightening the criteria for the latter, and halting it for a large number of current recipients, some expats living in the EU are expected to still receive it – but experts warn against exchange rate fluctuations, which could negatively impact the payment.
The editor of TopMoneyCompare, Russell Gous, told the press that:
“The predicted £400 increase in the UK state pension for 2025 is welcome news for retirees, especially as millions in the UK will now be going without the winter fuel allowance. For tens of thousands of expats, this will come as a double boost as those living in certain EU countries are still in line to receive the Winter Fuel Allowance as part of the Brexit withdrawal agreement. It’s important to remember that expats receiving their pensions in foreign currencies are especially vulnerable to exchange rate volatility. A stronger pound can erode the value of their pension when converted to local currency, potentially offsetting the benefits of the increase.”
It’s not entirely clear when the anticipated pension rise will occur, but there are some potential downsides. The threshold before you start paying tax has been frozen at £12,570 and will remain at this figure. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, told the UK press in early September that
“… frozen tax thresholds mean that the full new state pension is creeping ever closer to tax paying territory and a similar rise next year could see it surpass it.”
If you are in the hinterland of being just over the tax threshold, talk to a pension adviser or tax expert about how the changes could affect the amount of tax that you pay.
Expat Mortgage Lender Returns to the Market
Marsden Building Society has announced some extra products for British expats overseas who plan to invest in holiday lets, as well as overseas buyers, the company announced recently. They won’t be asking for a personal affordability check, although if you’re an overseas buyer in the UK, you’ll need permanent right to reside or pre-settled or settled status. You’ll also need a minimum income of £25K, plus a minimum property value of £125,000. Marsden are offering an interest-only or repayment mortgage up to 75% loan to value. You will also be entitled to spend 90 days in the property yourself.
Head of lending at Marsden, Donna Barclay, told the press:
“We understand the challenges expats face when investing in UK property and we’re dedicated to providing them with the support they need. Our relaunch into the expat furnished holiday let market further reflects our commitment to our intermediary partners and meeting the requirements of their expat clients. This coupled with our recent mortgage criteria updates will help provide an even smoother and seamless process for brokers to submit business to us.”
Marsden are not alone: LendInvest are also offering a 75% loan to value (LTV) mortgages for standard properties, houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUFBs). This sort of product is aimed at experienced landlords, including expats, and LendInvest says that it is targeted at limited companies, special purpose vehicles (SPVs), and limited liability partnerships.
Commercial director at LendInvest Sophie Mitchell-Charman says:
“… we understand the challenges that expat landlords face when seeking property finance. Our new expat buy-to-let mortgage products are designed to provide fast, simple solutions, helping expat landlords to manage their portfolios more effectively from abroad.”
Property experts say that MUFBs (multi-unit freehold blocks) are proving popular at the moment, particularly in Scotland and the North West of the UK. Mortgage brokers add that these products are high yield with a lower risk for void periods.
Wealthy Expats in Portugal Survey Report
This recent report warns that NHR tax holders need to take early action in preparing for progressive tax hikes of 28% to 48% once their NHR tax status changes. The Portugal Pathways Report advocates discussing your current tax status, cross border income, and planning with advisors, noting that to date, relatively few expats who may be affected have done so.
According to the report, 73% of an estimated 72,000 expats in Portugal have delayed exploring their tax options, laying themselves potentially open to substantial increases once their NHR status ends.
Oman Bans Expats From Selected Jobs
The Oman Ministry of Labour has issued Ministerial Resolution No. 501/2024, further restricting jobs to Omani nationals. Systems analyst and hotel management posts are now restricted to Omani personnel, along with some engineering jobs, commercial brokers and marketing specialists, to name but a few professions. This is part of a recent ‘Omanisation’ initiative to ensure that locals are prioritised for jobs over expats.