London is the most desirable city in the world for high-net-worth individuals buying luxury homes despite the upcoming Brexit and crippling sales tax rates.
In its new Alpha Cities’ Index, which ranks the attractiveness of a city for ultra-high-net-worth individuals (those with a net worth of $30 million or more) considering buying high-end homes, Wealth X, Warburg Realty and Barnes Realty found that London is unmatched in its appeal, from culture to financial security.
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The index ranked 50 of the world’s top cities for the wealthy on a number of metrics including cultural experience, educational opportunities, ease of doing business, connectivity, property taxation, and green credentials.
"The No. 1 ranking for London reflects its strength across the board, ranking in the top four places in more than half of the 11 indicators—cultural richness, luxury shopping, education, connectivity, financial safe haven, ease of doing business, and the number of ultra-wealthy individuals living in the city," the report said, adding that it "also ranks in the top ten for personal safety and its green credentials".
However, the report noted that that its property tax regime compares less favorably than most of its peers. This is due to the U.K. government introducing two hefty stamp duty increases since 2014 for more expensive properties.
The U.K. capital was followed by New York (it lags behind London on personal safety and its green footprint), Tokyo, Sydney and Paris.
TOP FIVE ALPHA CITIES
| Ranking | City |
|---|---|
| 1 | London |
| 2 | New York |
| 3 | Tokyo |
| 4 | Sydney |
| 5 | Paris |
"Investors from around the world are eyeing opportunities in new property development and renovation of hotels, penthouses, and private villas, ahead of a likely end to sanctions in the next few years, which will trigger a surge in U.S. investment," according to the report.
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Lisbon, meanwhile, is gaining favor for its wide range of tax incentives, including the "Golden Visa" program for non-E.U. citizens, and affordable high-end housing on offer, while Berlin is catching investors’ eyes since its luxury real estate sector remains relatively affordable, following a long period of subdued capital value growth.
TOP FIVE DESTINATIONS OF THE FUTURE:
| Ranking | City |
|---|---|
| 1 | Cuba |
| 2 | Lisbon |
| 3 | Berlin |
| 4 | Taos |
| 5 | Tel Aviv |