Tax, mobility and the limits of wealth migration

I am writing this from Los Angeles, where I'm presenting the findings of The Wealth Report 2026 to a mixture of developers, the wealthy and their advisors.

California's proposed “billionaire tax” looms large here. Voters will decide in November whether to plug holes in the state budget with a one-time 5% tax on the total wealth of the 200-or-so residents worth more than $US1bn. I arrived here from New York City, where Mayor Zohran Mamdani and Gov. Kathy Hochul have proposed a pied-à-terre tax on homes worth at least US$5 million.

It's perhaps unsurprising that much of the talk is about tax. Will these measures raise the required amounts? Will there be negative, unintended consequences? Will the wealthy move elsewhere? The answers are 'no', 'yes' and 'it depends'. In the case of the pied-à-terre tax, the general view is that it's unhelpful, will weigh on development, but the negative impacts will be marginal rather than dramatic. This is a theme I discussed in relation to London earlier this week – the threats to the likes of New York City and London isn't that politicians make cities uncompetitive overnight, but rather they steadily erode confidence at the margins.

Politicians like taxing real estate because it’s fixed in place. As Jonathan Miller notes, its owners aren’t. 

Hugely embarrassing

Tax and mobility dominated the first Wealth Report in 2007. One prediction stands out: that tax would become "the single most important feature shaping the future location of primary residences".

Demand for homes in tax-friendly jurisdictions, we said, would "grow exponentially over the short to medium term" – and those markets would outperform over time.

Some context is useful here; by 2007, the UK’s non-dom regime was already under pressure. Then chancellor Gordon Brown had long argued it was an unfair loophole, while international scrutiny was intensifying, with the IMF grouping Britain alongside offshore financial centres like Bermuda and the Cayman Islands.

Pressure from governments and the OECD was rising as wealth became more mobile, pointing towards growing demand for low-tax jurisdictions.

Multilateral scrutiny

On the face of it, we were right. Average prime property values in Monaco have surged by 230% since 2007, Zurich, Geneva and Jersey climbed 116%, 103% and 89% respectively, compared with a more pedestrian 26% in London and 15% in New York.

But the traditional tax havens haven’t emerged unchallenged. The US’s FATCA (2010) and the OECD’s Common Reporting Standard (2014) marked a shift from fragmented treaties to a more unified global transparency regime. More than 100 jurisdictions – including traditional havens like Switzerland, Luxembourg and the British Virgin Islands – signed up to the measures, bringing secrecy under multilateral scrutiny.

Secrecy became unwieldy and expensive – particularly for Europeans – just as countries were stepping up competition for highly mobile, affluent residents. The UAE, long a 0% personal income tax jurisdiction, began reaping the rewards of its repositioning as a business and lifestyle hub from the mid-2010s. Meanwhile, countries with progressive tax systems like Italy, Greece and Portugal introduced preferential regimes for wealthy newcomers – a phenomenon some experts describe as the rise of “hybrid havens”.

The final word

By 2020, mobile wealthy individuals had more low-tax options than ever, and the pandemic supercharged mobility. Greater flexibility around where people worked led many to seek sunnier climes and more flexible lifestyles.

Since then, the picture has shifted again. Western governments have raised taxes to repair public finances, while the UK’s non-dom regime – first targeted in 2008 – was ultimately overhauled in 2025. At the same time, “hybrid havens” have tightened their offers, with Portugal and Italy scaling back incentives.

The impact of all this remains contested. Only a small share of wealthy individuals relocate purely for tax reasons, and high-profile moves can distort perceptions, according to the EU Tax Observatory. What is clear is that, while lower-tax locations are gaining ground, many still struggle to match the lifestyle, infrastructure and real estate offered by established hubs like London and New York City.

“We regularly sit down with clients and ask: ‘what do you actually want?’” says Alasdair Pritchard of Knight Frank’s Private Office. “Often it isn’t just tax – it’s space, schools, lifestyle, design. Tax may be the starting point, but it’s rarely the final word.”

Geopolitical uncertainty

The conflict in the Middle East has added a new, competing dynamic. Back in March, less than three weeks into the war, I wrote that London was beginning to see an uptick in short-term returns from Dubai. By early April, the impact was clearer: the number of prospective tenants that registered in the prime central London lettings market during March was 16.6% higher than the same month in 2025. For properties valued at more than £1,000 per week, the increase was 16.9%.

This is now translating into more sustained demand in prime European sales markets, writes Anna Ward. Recent deals include a €17 million purchase in Madrid by a family relocating amid geopolitical uncertainty.

Knight Frank is also seeing early displacement of demand, with buyers who had planned a move to the Middle East turning their attention to Europe. One client has already signed a lease in Monaco, a typical step ahead of purchasing. Buyers must hold a permanent Monaco address before residency is approved, either via a rental contract of at least 12 months or by purchasing a property.

There is much more on what’s driving European mobility in Anna’s piece, from shifting tax regimes to lifestyle considerations, and from education to long-term security.