From April 2028, owners of homes in England worth £2 million or more will pay a new annual charge, the High Value Council Tax Surcharge. The press calls it the mansion tax. In August 2026 it emerged that valuation officers may be sent inside homes to value them, and that an owner who obstructs one faces a fine of up to £200.
That story has put an old question back on the table. Why are so many Britons, and Europeans more widely, moving to the UAE? And is the "millionaire exodus" figure that has been quoted for years actually true?
Below I set out the new UK rule, put the cost of owning an expensive home in the UK next to Dubai, and check the millionaire numbers against the latest sources. Every figure was checked against at least two current sources, listed at the end.
The short version
- The UK surcharge starts in April 2028: £2,500 to £7,500 a year on homes in England worth over £2 million. The OBR expects about 157,000 homes to pay.
- The surcharge itself is small. The real pressure on a UK property owner is 40 percent inheritance tax, 24 percent tax on gains and higher tax on rental income from 2027.
- The UAE has no personal income tax, no capital gains tax, no inheritance tax and no annual property tax. A Dubai buyer pays a one off 4 percent DLD fee and, if living in the home, an annual housing fee.
- The famous "16,500 millionaires left the UK in 2025" came from Henley & Partners. In June 2026 Henley dropped its migration counts and now calls millionaire migration "modest".
- UBS counts about 2.43 million USD millionaires living in the UK and about 183,000 in the UAE.
- The regional conflict that began in February 2026 sent many Britons out of the UAE for a while. The return started in September.
What the UK mansion tax is, band by band
The surcharge was announced in the November 2025 Budget. It applies in England only. The owner pays it, not the occupier, and that includes companies and trusts. The money goes to central government rather than the local council, and the charges rise with CPI inflation each year.
| Home value | Annual charge | Homes affected (2028 estimate) |
|---|---|---|
| £2m to £2.5m | £2,500 | 66,000 |
| £2.5m to £3.5m | £3,500 | 53,000 |
| £3.5m to £5m | £5,000 | 24,000 |
| Over £5m | £7,500 | 14,000 |
The property counts are the Office for Budget Responsibility's, about 157,000 homes in total. The OBR expects the surcharge to raise about £400 million in 2029-30. It comes on top of ordinary council tax, which the owner still pays.
The inspections, the £200 fine and what HMRC says
The Daily Telegraph reported in August 2026 that the Valuation Office Agency will send valuers into homes whose value cannot be confirmed from existing records. They can check size, architectural style and the number of bedrooms, bathrooms and storeys. Anyone who intentionally delays or obstructs a valuation officer faces a fine of up to £200. Failing to provide information without a reasonable excuse can cost up to £500.
HMRC has not denied the plan. A spokesperson told The Negotiator that it does not routinely visit properties, that any visit would be by prior agreement, and that in the vast majority of cases banding will be decided from existing information. The consultation closed in July 2026. Legislation has not yet been introduced.
The bigger squeeze on UK property owners
On a £3 million home the surcharge is £3,500 a year, less than 0.2 percent of the value. Nobody emigrates over that on its own. The larger changes sit elsewhere:
- Non-dom status was abolished on 6 April 2025. Anyone UK resident for 10 of the last 20 years is now in 40 percent inheritance tax on their worldwide estate.
- From April 2027, unused pension funds fall into the estate for inheritance tax.
- From April 2027, tax on rental income rises by 2 points, to 22, 42 and 47 percent.
- From April 2026, dividend tax rose by 2 points at the basic and higher rates.
- Gains on residential property are taxed at up to 24 percent.
- Income tax tops out at 45 percent above £125,140.
A £3 million home: what you pay in the UK and in Dubai
Take a home worth £3 million. A UK resident buying it as a main home pays £273,750 in stamp duty. A non-resident pays £60,000 more, and a second home buyer £150,000 more. In Dubai the DLD registration fee is 4 percent, which is £120,000 on the same value.
| Cost | UK | Dubai |
|---|---|---|
| Tax on purchase | £273,750 as a main home | About £120,000 (4% DLD fee) |
| Annual holding cost | £3,500 surcharge plus council tax | About £7,500 housing fee if you live there |
| Tax on rental income | Up to 47% of rental profit from 2027 | Nil |
| Tax on a £1m gain | £239,280 | Nil |
| Inheritance tax on a £3m estate | £1,070,000 | Nil |
One line goes against expectations. Dubai's housing fee is 5 percent of the home's annual rental value, collected through the DEWA bill. If a home worth the equivalent of £3 million rents at a 5 percent yield, its rental value is £150,000 and the fee is about £7,500 a year. That is more than the UK surcharge. It is my estimate; RERA sets the rental value for each home. If you rent the home out, the tenant pays it.
So the gap is not the annual cost. It is the bottom three lines: tax on rent, tax on gains and inheritance tax. For a family passing a £3 million estate to its children, inheritance tax alone is a difference of more than £1 million. That figure is for a single person; couples have larger allowances.
Moving does not switch all of this off. UK property stays inside UK inheritance tax and UK capital gains tax wherever you live. Someone who has been UK resident for a long time stays in UK inheritance tax on their worldwide estate for 3 to 10 years after leaving. Speak to a UK tax adviser before you decide anything.
Why Britons and other Europeans are moving to the UAE
Around 240,000 British nationals live in the UAE, the largest European community in the country. Tax is the biggest reason, but not the only one:
- No personal income tax, capital gains tax or inheritance tax. Corporate tax is 9 percent on profit above AED 375,000.
- A ten year Golden Visa through AED 2 million of property.
- Direct flights to most European cities, international schools and day to day safety for families.
- Founders. Rathbones found that nearly 6,000 high growth British business owners moved abroad between January 2024 and January 2026, and the UAE was the single most popular destination.
It shows in the property market. betterhomes data for March and April 2026 put British buyers first among foreign buyers in Dubai, ahead of Indian, Australian and Egyptian buyers. That ranking covers the brokerage's own deals only. Across the whole country, the ONS says 246,000 British nationals emigrated in 2025, but it does not publish how many went to the UAE.
How many millionaires are actually moving
The number quoted for years came from Henley & Partners. Its 2025 report projected a net inflow of 9,800 millionaires to the UAE and a net outflow of 16,500 from the UK. Those estimates were built by New World Wealth, largely from where people say they work on LinkedIn, and groups such as the Tax Justice Network had challenged the method for years.
In June 2026 Henley dropped New World Wealth and published its new report with no migration numbers at all. It now describes millionaire migration as "modest", and says one country's outflow estimate can vary by an order of magnitude depending on how a millionaire is defined. The 16,500 figure should no longer be quoted as fact. My own July article on European relocation to the UAE cited the 2025 counts before this correction.
The more reliable data is how many millionaires live in each country. UBS's Global Wealth Report, published in June 2026, gives these for 2025:
| Country | USD millionaires |
|---|---|
| United Kingdom | about 2,428,000 |
| United Arab Emirates | about 183,000 |
The same report says the UK gained more than 43,000 new millionaires in 2025. So even if thousands left, the number living in the UK did not fall. HMRC's own figures, up to April 2024, show non-dom taxpayers falling by about 1 percent. The honest picture is a steady and meaningful flow, not a stampede.
What the 2026 conflict changed
From 28 February 2026, when fighting broke out in the region, missiles were intercepted over Gulf cities, flights were repeatedly cancelled and UAE schools closed for weeks. The Financial Times reported that about one in eight Britons in the UAE, around 30,000 people, had left. The British Embassy and the Dubai Media Office did not confirm the figure, and many of those departures were temporary. The UK government moved quickly: Chancellor Rachel Reeves pitched Britain as a "safe harbour economy" for wealthy expats.
At the end of September 2026, UAE schools have reopened, the Dubai and Abu Dhabi airports are operating and some residents have started coming back. The regional situation is still volatile, and some European airlines have suspended Dubai flights into October. The property market did not stop: Dubai recorded about 11,600 sales worth AED 27.9 billion in August 2026.
If you are deciding
If you live in the UK and are weighing Dubai, do not make the mansion tax your reason. The numbers that decide it are your inheritance tax, your tax on gains and your tax on rent, and only a calculation on your own assets will show them. Remember too that leaving the UK tax net takes years, and UK property stays in it after you go.
Dubai has its own costs. The 4 percent fee is paid once, the housing fee on an expensive home is not small, and in 2026 regional risk stopped being theoretical. For the full cost of living comparison with London, read my European relocation data. For residency through property, see the Golden Visa property threshold.
Which country would you rather live in?
I am asking you, because the answer is different for every family. The UK, with its legal system, universities and family close by? Or the UAE, with zero income tax, sunshine and a risk that showed itself this year? Send me your answer and your reason through the contact page or on Instagram. If you are looking at buying in Dubai, I am happy to run the numbers for your own situation.
Sources
- The Negotiator, 25 August 2026, and reporting by Estate Agent Today and The National on inspections and fines
- OBR estimates and Burges Salmon's summary of rates and property counts
- UBS Global Wealth Report, June 2026
- Henley & Partners Private Wealth Migration Reports 2025 and 2026, and Tax Justice Network analysis
- CNBC, April 2026, citing the Financial Times and Rathbones
- ONS, May 2026
- betterhomes and Dubai Land Department data
Frequently asked questions
It is the High Value Council Tax Surcharge, announced in the November 2025 Budget. From April 2028 owners of homes in England worth £2 million or more pay an extra £2,500 to £7,500 a year on top of council tax, rising with CPI. The OBR expects about 157,000 homes to pay and about £400 million a year in revenue by 2029-30.
According to reports in August 2026, intentionally delaying or obstructing a valuation officer carries a fine of up to £200, and failing to provide information without a reasonable excuse up to £500. HMRC says it does not routinely visit homes, visits are by prior agreement and most values are set from existing records.
There is no annual property tax in Dubai. Buyers pay a one off 4 percent Dubai Land Department fee. Residents pay a housing fee of 5 percent of the home's annual rental value through the DEWA bill; owner occupiers pay it on a RERA estimate, and on a rented home the tenant pays it. There is no tax on rental income or on gains.
In the UK: £273,750 stamp duty as a main home, £3,500 a year surcharge plus council tax, £239,280 on a £1 million gain and £1,070,000 inheritance tax on a £3 million estate for a single person. In Dubai: about £120,000 DLD fee, an estimated £7,500 a year housing fee if you live there, and nothing on gains or inheritance.
Around 240,000 British nationals live in the UAE, the largest European community in the country. After the regional conflict began on 28 February 2026, the Financial Times reported that about 30,000 had left, many temporarily; that figure was not confirmed by the British Embassy or the Dubai Media Office.
Nobody has a reliable count. Henley & Partners projected a net UK outflow of 16,500 millionaires and a UAE inflow of 9,800 for 2025, but in June 2026 it dropped those estimates, published no migration numbers and called millionaire migration modest. UBS counts about 2.43 million USD millionaires living in the UK and about 183,000 in the UAE, and says the UK gained more than 43,000 millionaires in 2025.
Mainly tax: the UAE has no personal income tax, capital gains tax or inheritance tax, while the UK abolished non-dom status in April 2025 and is raising tax on rent, dividends and pensions at death. Other reasons are the ten year Golden Visa through AED 2 million of property, direct flights to Europe, international schools and daily safety. Rathbones found the UAE was the top destination for nearly 6,000 British founders who left between 2024 and 2026.
Not entirely. UK property stays within UK inheritance tax and UK capital gains tax wherever you live. Under the rules since April 2025, a long term UK resident remains in UK inheritance tax on their worldwide estate for 3 to 10 years after leaving, depending on how long they lived in the UK. Take UK tax advice before moving.
At the end of September 2026 UAE schools have reopened and the Dubai and Abu Dhabi airports are operating, and some residents who left have started to return. The regional situation remains volatile and some European airlines have suspended Dubai flights into October. Check current UK Foreign Office travel advice before deciding.
Surprisingly, the annual cost can be higher in Dubai if you live in the home. On a home worth the equivalent of £3 million renting at 5 percent, the Dubai housing fee is about £7,500 a year, against a £3,500 UK surcharge plus council tax. The UK costs more on rent, gains and inheritance, not on the yearly bill.