Potential UK tax reform could drive ultra-wealthy to Singapore’s luxury real estate market

SINGAPORE: The potential abolition of the United Kingdom’s “non-dom” tax status is expected to ripple through the global luxury real estate market, with Singapore poised to benefit as ultra-wealthy individuals consider relocation options.

According to property agency Huttons, the UK’s planned tax reform could increase interest in Singapore’s residential luxury market as affluent non-dom residents seek new destinations to preserve their wealth.

The UK government has announced intentions to eliminate the non-domiciled tax status, effective April 6, 2025. This move will subject non-dom residents to UK taxation on all foreign income and capital gains, prompting many ultra-high-net-worth individuals (UHNWIs) to explore more favorable environments.

Besides Singapore, other potential relocation choices include Dubai, Italy, and Switzerland, Huttons told Singapore Business Review (SBR).

“These ultra-wealthy foreign residents might set up family offices, apply for citizenship, or invest in real estate,” Huttons told SBR, explaining how an influx of new residents could shape Singapore’s luxury property landscape.

The firm’s data on the recent quarter points to the demand for high-end residences among new Permanent Residents (PRs) and naturalized citizens.

Following the increased Additional Buyer’s Stamp Duty (ABSD) rate of 60% imposed on foreigners in April 2023, there has been a noticeable rise in applications for PR status and citizenship, with many new residents opting to purchase luxury non-landed homes.

In the third quarter of 2024 alone, 55 luxury non-landed homes changed hands, generating $407.7 million in total transaction value. While this represents a decline of 3.5% quarter-on-quarter (QoQ) and 15.5% from the previous quarter, the figures still showed a year-on-year increase.

Rental prices also surged as UNHWIs sought safe-haven investments amidst geopolitical tensions and global economic uncertainty. The overall luxury non-landed home rents grew by 2.7% QoQ, reaching an average of $14,932 per month.

Demand extended to Good Class Bungalows (GCBs), with 12 GCBs sold in Q3, up from eight in the previous quarter. The value of these sales totaled $541.2 million, marking a significant 80.9% QoQ increase.

Looking ahead, Huttons anticipates continued momentum in both sales and rentals in Singapore’s luxury market, including the GCB sector. As prices stabilize and align with market expectations, Singapore’s real estate market may see even more activity from wealthy individuals seeking security and lifestyle benefits in a politically stable environment.