Labour's non-dom tax raid triggers £700m property sell-off

Telegraph

7 days ago

Wealthy Emiratis are pouncing on prime London homes left behind by fleeing non-doms, analysis suggests.
Some £694m worth of 'super prime' homes sold in London in the first half of the year, according to Beauchamp Estates, a luxury estate agency.
The company said 70pc of sellers were so-called 'non-domiciled people' who had fled Britain after Rachel Reeves, the Chancellor, ended their tax status in April.
The changes, first floated by the Conservatives, but ultimately brought in by Ms Reeves in her October Budget, removed domicile status from the UK tax system, which means new arrivals to Britain must pay the same tax as everyone else after four years.
New arrivals will only benefit from 100pc tax relief on foreign income and gains for the first four years of their tax residence, as long as they have been non-resident for the past 10 years.
The move has sparked fears of an exodus of wealthy would-be taxpayers to more lenient tax regimes in the Middle East, and reportedly prompted the Chancellor to consider watering down the pledge.
Gary Hersham, of Beauchamp Properties, said that a 'fascinating 'house swapping' trend' had emerged in London's property market as a result, with 'a wave of non-doms relocating to Dubai and Abu Dhabi, and a return wave of Emirati buyers purchasing large residences in London'.
Jo Eccles, of prime central London buying agency, Eccord, said fleeing non-doms were selling 'some fabulous prime and super-prime homes that rarely come up for sale', presenting unique buying opportunities for wealthy Emiratis.
Middle Eastern buyers typically flock to London in summer, lured by the status symbol of owning property in the capital, high-end shopping destinations and the ease of access to Europe.
Ms Eccles said: 'Emiratis tend to flood to London at this time of year, and their supercars are a familiar sight on the streets of Knightsbridge until around September.
'As buyers, they're known for their spontaneity, so if they see a property they like, it's not uncommon for them to snap it up on a whim without worrying too much about the price or what else might be out there.'
However, Beauchamp Estates found that the number of luxury homes being sold in the capital in the first half of the year had fallen by almost half.
The company said the value of deals agreed for 'ultra-prime' homes worth over £15m had fallen by 13pc from £795m since 2024.
It comes amid fears Labour could implement a wealth tax on assets worth over £10m as the Government desperately tries to plug holes in the public finances.
Left-wing MPs are said to be lobbying the Chancellor for additional taxes on the wealthy. However, Jonathan Reynolds, the business secretary, dismissed the idea as 'daft', and urged backbenchers to 'be serious'.
Meanwhile, analysis by estate agent Savills found that the number of £5m-plus homes being sold was at its second-lowest since 2020, and 15pc lower in the three months to June than the same period last year.
However, sales volumes were still 18pc higher than the pre-Covid average, as 'savvy buyers are keeping momentum afloat', said Nick Maud, of Savills.
The estate agent found under-30s accounted for almost a quarter of London buyers in the first half of the year, compared to 19pc in 2024 and 12pc a decade ago.
Mr Maud said: 'With the autumn Budget approaching, the Government will be examining ways to raise revenue.
'While there will always be a temptation to link taxes to fixed assets such as property, there are also lessons to be learnt from previous ill-fated mansion tax proposals.
'Ultimately, valuation challenges, and failure to distinguish net vs gross wealth, and the risk to asset-rich, cash-poor owners, outweighed the modest revenue potential.'