“128,000 millionaires are expected to relocate around the world this year. This is an unprecedented number that eclipses the previous record of 120,000 set in 2023. As the world faces a perfect storm of geopolitical tensions, economic uncertainty and social upheaval, millionaires are moving in record numbers,” Dominik Volek, head of retail clients at The Guardian, said in June. Henley & Partnersa British investment migration consultancy. When we talk about super-rich, we are referring to those people who belong to the 1% with the most assets in a country. That is why the amount varies between countries. To be one in Monaco, you need to accumulate almost 13 million dollars. In Spain, 2,500,000 is enough, according to the 2024 wealth report by Knight Frank.
And that elite is moving. They are moving to other countries. Some do so to improve their quality of life in terms of climate, gastronomy, education, political stability or social life. Others, for tax benefits for their great fortunes. In recent years, according to The Financial Timesmillionaires are looking for lower tax rates. The biggest loser is China, with 15,800. Next is the United Kingdom, with a surprising figure: 9,800 large fortunes will leave the islands in 2024, more than double the number of the previous year. Next, in this order, are India, South Korea and Russia. The biggest recipients are the United Arab Emirates, Australia, the United States, Italy, Greece and even Spain.
Governments often value the wealth and consumption brought by the rich. However, there is also a risk that local populations will criticise them if the influx of wealthy foreigners pushes up property prices, puts pressure on public infrastructure or leads to gentrification.
City-states such as Dubai and Singapore have been competing for years to attract wealthy expatriates with offers of low taxes. In the case of Dubai, the offer is that there is no income or capital tax for individuals. This has reinforced this tendency to change residence. In the last two decades, several countries have introduced privileged tax systems designed specifically to attract wealthy foreigners, such as Cyprus, Greece, Italy, Malta, Portugal and Spain, for example, with the Golden Visa, with which non-EU citizens obtained residency in our country if they made an investment in real estate of 100% 500,000 euros free of charges or encumbrances.
Taxation is a key factor in the decision of wealthy migrants to choose their destination. Lowering taxes on large fortunes to attract high incomes often creates a race to the bottom. “The problem is that the only ones who win here are the super-rich,” says Yago Álvarez, author of the economic essay Salmon Fishing (Captain Swing) and journalist specializing in economics in The Daily Jump. “By losing public funding, the welfare states of countries are worsening. If a rich person moves to a country it should be for reasons other than tax advantages,” he says by telephone and recalls that the G20 is demanding minimum taxes for large fortunes, a proposal by economist Gabriel Zucman. This minimum tax on large fortunes is also being debated in the OECD.
All Western European countries have seen an increase in the number of high net worth individuals. Italy and France stand out in this regard, with significant increases of 8.5% and 6.5% respectively. However, according to the Financial Timesthe new Labour government and its new tax measures The new measures are causing British billionaires to flee. These include a review of the “non-dom” system, a tax privilege inherited from colonial times. It allowed foreigners residing in the United Kingdom to avoid paying British taxes on income and capital gains obtained abroad for a maximum of 15 years. “Saying that the British are going to other countries because of the new measures of the Labour government is nothing more than a way of putting pressure on the executive using the media. It is like when the tax on large fortunes was raised here and it was said that they would go to Portugal. The figures today tell us that most of them have ended up accepting it and the collection has increased,” says Álvarez. The tax on large fortunes in Spain was introduced in 2023 and, for now, the data supports it: tax collection in 2024 has broken its record with 122.5 billion in the first half of the year, 10% more than the previous year.
UBS Global, a multinational investment bank, published A report predicted that the United Kingdom and the Netherlands would be the countries that would lose the most millionaires by 2028down 17% and 4% respectively. But they are the exception. The number of millionaires will increase in 52 of the 56 countries analysed by the bank. Wealth will increasingly be concentrated in the hands of more billionaires.
What is happening in Spain with billionaires?
“Madrid, Spain, offers exactly what you are looking for: security, economic robustness, legal security and then a fantastic gastronomic and cultural offer. And if you add to that the fact that it is a country that has a strong currencywhich is the euro, makes it an ideal country to live and invest in,” He told Euronews Octavio Rojas, president of ‘Mexicans Here’the association of Entrepreneurs, Businessmen and Outstanding Mexican Professionals in Spain. Life is good in Spain. The climate, the culture, being a gateway to the European Union, the gastronomy and leisure make our country attractive abroad. This is an asset for many super-rich people. But both the Golden Visas – which will be eliminated in a few years -, the Socimis and the Sicavs have attracted rich foreigners to Spain in recent years. Our country is ranked 15th among the 25 main HNWI population markets. [personas con alto poder adquisitivo, por sus siglas en inglés]. The Spanish territory has 5.6% of millionaires above the global average, Following the latest Capgemini study; Despite global instability, the world’s high-net-worth population and wealth are back at record levelsThere are 250,600 people with very large fortunes across the country. The ultra-rich — defined as those with more than $30 million in assets — have also increased by 6.3%.
It is difficult to draw a profile of the super-rich who come to Spain. However, “people of Venezuelan and Mexican nationality” are identified, says Margarita Barañano, a sociologist and director of the Contemporary Sociocultural Studies Research Group. The language, the real estate market and political stability are some of the reasons. “Because of the Golden Visas, there
will also be many Russians, Americans and Latin Americans in general, but it is difficult to establish this,” adds Yago Álvarez.
The areas of Spain where most millionaires buy homes are Andalusia, followed by Madrid, Catalonia and the Valencian Community, According to the Real Estate Yearbook of the Property Registrars. However, the majority of them live in the Community of Madrid, which has 43% of the super-rich. The so-called Mbappé Law, approved a few months ago in the Community of Madrid, establishes a 20% deduction on income tax for foreign investors who live in the capital for at least six years. Despite its name, it is not aimed at the Real Madrid footballer, but at people with even more money than the French star. It is aimed at attracting the rich. Today, Madrid is referred to as “the new Miami” and some call the exclusive Salamanca district of Madrid “Little Caracas”.
“The best tax destinations for the super-rich are those that have a 100% tax exemption on wealth tax, which is mainly the Community of Madrid or, more recently, Galicia and Murcia,” says Álvarez. And in which areas do they live or buy? “In the already stressed areas of these cities. This reinforces the imbalance with the income level of the already resident population and the prices of housing that is vacant or that is rented, or new,” warns Barañano. “The purchase in these stressed areas represents a very high figure. There is talk of 80% in them,” underlines the professor at the UCM.
More tension in the housing market
How does the arrival of the super-rich affect the lives of Spaniards? One of the main arguments of governments to favour their arrival with tax benefits is the rise in consumption. One of the sectors that is most rewarded is that of luxury services. Yachts, high-end goods and real estate are some of their main purchases. However, it is in housing where one sees one of the greatest tensions with the local population. “Their arrival has contributed to the great escalation of prices that we have experienced, and that has aggravated the difficulty of access to housing, with the consequent expulsion of increasingly large sectors of the population from it,” says Baraño.
Golden Visas and SICAVs favour those who invest in real estate in Spain. “This creates an obstacle that translates into the rise in the price of housing and urban speculation,” adds Álvarez. “It leaves many more people without the possibility of maintaining or obtaining their own home,” explains Baraño. “They are no longer limited to the highest-income neighbourhoods, but contribute to raising prices in other more peripheral areas,” he concludes.
In a context of globalisation, the arrival of these multimillionaires makes the areas they move to look more like the world capitals that concentrate wealth. “Local commerce is replaced by that of large franchises, we become homogenous with other parts of the world,” says sociologist Baraño. This is exemplified by an increase in luxury hotels and restaurants or a loss of neighbourhood identity due to gentrification.
You can follow ICON on Facebook, X, Instagramor subscribe here to the Newsletter.
#Billionaires #emigrate #record #number #superrich #move #country
