The Rise of Luxury Property Rental
The Rise of Luxury 
Property Rental

The rise of luxury property rental

Over the course of 2024 the luxury property rental market has experienced a significant surge in demand. Traditionally, High Networth Individuals (HNWIs) have preferred to purchase property, which acts as both a stable investment and a guarantee of control over their home. This is still happening all over the world. But an increasing proportion are looking to rent their next home instead of buying. This article will explain why.

The end of non-dom in the UK

One of the primary drivers of this trend is the changing tax environment in the United Kingdom. London has long been a magnet for the world’s wealthy, with the ‘non-dom’ regime allowing them to reside elsewhere for tax purposes. This is all changing. Under serious pressure from Labour on this issue, the last Conservative Government announced a wind-down of this regime. Now Labour have won the election and are moving far faster to end it. This has naturally prompted many HNWIs to reconsider their residency in the UK.

The top location: Switzerland

There is interest from these HNWIs in several other destinations, including Italy and Dubai. But here at Unica we are seeing the biggest increase in interest in one non-EU European nation – Switzerland.

Switzerland does not offer a non-dom status, but it does provide an attractive alternative in the form of “lump sum taxation.” Under this system, taxes are levied based on an individual’s living expenses rather than their global income. This approach has proven highly appealing to HNWIs seeking to minimize their tax liabilities while maintaining a luxurious lifestyle. Consequently, there has been a marked increase in interest in Swiss properties, particularly in prime locations such as Geneva and the Alpes.

Why rent?

The process of acquiring high-end property in Switzerland and other desirable European locales can be time-consuming and complex. The best properties, often situated in exclusive neighborhoods with top-tier amenities, are rarely available for immediate purchase. This scarcity of available properties, coupled with the bureaucratic procedures involved in buying real estate, has made renting an increasingly attractive option for HNWIs looking to relocate quickly. Renting allows these individuals to secure a prestigious address in a short time frame, providing immediate access to the luxury and convenience they seek.

The flexibility that renting offers is another significant factor contributing to its rising popularity among HNWIs. In an uncertain world, where economic, political, and social landscapes can shift rapidly, many wealthy individuals are hesitant to commit to purchasing property in a new location without first experiencing it firsthand. After all, it wasn’t so long ago that London was seen as a forever-home for the super-rich. Renting provides an opportunity for HNWIs to assess whether a particular city or region suits their long-term needs and lifestyle preferences. This option is particularly appealing in markets where property values are volatile or where future residency plans are uncertain.

Remote work and renting

The rise of remote work and the increasing mobility of global elites have also played a role in this trend. As the ability to live and work from anywhere becomes more feasible, HNWIs are less tethered to a single location. Renting offers the flexibility to move between luxury properties in different countries or regions, depending on the season, lifestyle preferences, or business needs. This mobility is further enhanced by the growing availability of fully serviced, furnished luxury rentals that offer all the amenities and comforts of a permanent residence, without the long-term commitment.

In conclusion, luxury rentals are likely to become an increasingly common option for HNWIs who want to keep as much flexibility as possible. The wisdom of actually buying a luxury property and seeing its value rise won’t go anywhere, and many HNWIs will still choose to buy – but renting will take a larger and larger portion of the pie.

Published: September 11 2024
Author: Ricardo Gato

The rise of luxury property rental

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