Britain abolished the non-dom regime on 6 April 2025, ending a two-century-old arrangement that let residents keep foreign income offshore and untaxed. The replacement is a short, sharp welcome: new arrivals get four years of relief on foreign income and gains, and after that they pay like everyone else, with inheritance tax now following long-term residence rather than the old notion of domicile. Prime central London has now had its first full tax year under the new rules. The obituaries were premature; so were the denials.
What the year actually showed is a sorting. The market did not empty out. It separated into people for whom London was a tax position and people for whom it was a life, and the two are behaving differently in the data — in what comes to market, at what price, and how quickly it sells.
What changed and what did not
The mechanics matter because they decide who feels the pain. The four-year regime is generous to the genuinely mobile: a banker or founder arriving now pays nothing on offshore income for four tax years. The losers are the settled — families here for fifteen or twenty years under the remittance basis, often with offshore trusts, who now face worldwide taxation and, in time, inheritance exposure on worldwide assets.
Some of that group was always going to leave. Advisers had warned for years that the regime was politically unsustainable; both main parties promised abolition before the 2024 election. The surprise is not that people left. It is how few of their neighbours followed.
The leavers and the stayers
The leavers have a profile: older, internationally footloose, often with houses in three countries already. Their destinations are the usual ones — Milan and its flat-tax regime, Dubai, Switzerland, Monaco — and their departures were planned, not panicked. Many had kept one foot out of London for years.
The stayers also have a profile. Americans, taxed worldwide by their own country whatever Westminster does, barely noticed. Families with children in London schools noticed a great deal and stayed anyway. Founders mid-scale, executives mid-career, and the genuinely London-identified rich did the arithmetic, winced, and paid. A tax that was the reason to be somewhere can be cancelled; a life cannot be reassembled in Milan over a summer.
The mistake in much commentary was to treat the non-dom population as one market. It never was. The tax-driven fringe left, and the lifestyle core stayed — and the lifestyle core was always larger than the headline writers assumed.
Reading the price cuts honestly
Prime central London's asking-price reductions, where they have come, need careful reading. A cut from a 2021 guide price is often a correction of fantasy rather than a fall in value; sellers anchored to a boom-year number take time to meet the bid. The more telling sign is what never reaches the portals at all. Off-market dealing has deepened, because neither side of a £20 million transaction enjoys publicity.
The mid-market — good flats and houses between roughly £3 million and £7 million — has been steadier than the very top, supported by domestic buyers and Americans taking advantage of the currency. It is the £15 million-and-above bracket, most exposed to the departing non-dom, that has felt thin. Even there, thin is not the same as distressed. London's best streets have the Peak's problem in milder form: owners who can afford not to sell.
What the next two winters decide
The honest verdict, a year and a half in, is that abolition cost London a fringe and priced a lesson. The four-year regime is quietly competitive for attracting new money; the inheritance-tax tail — worldwide exposure after long residence — is the part that will keep older, estate-planning wealth away, and it is the part advisers would amend if anyone asked them.
Watch two things from here. The first is whether the four-year window actually pulls in the next cohort of founders and financiers, which takes years to show. The second is the autumn fiscal calendar: a government short of money will be tempted to revisit the wealthy, and every revisit restarts the conversation in every kitchen in Kensington. London's prime market has survived worse than a tax change. What it struggles with is uncertainty — and that, as of late 2026, is the one commodity still in generous supply.
