We are all worried about Dubai crashing right now.
But it might be the opposite.
Demand for Dubai real estate might be infinite.
Why do I say that in the midst of war in the Middle East?
Two reasons.
#1 People are losing patience with taxation in the West.
When you think about all the ways you get taxed from birth to death, you almost wonder what’s the point. It seems it’s designed to allow you to make a little bit of income, but not get rich.
Let’s say you are working a job in the UK. Any income over £50,000 is taxed at 40%. Then around £100,000 there is a weird transition point above which the earlier £12,500 tax free income gets reversed and you are paying 60% tax on incremental income.
After you’ve paid 45% to the government on your income let’s assume you invest it in some stocks.
Let’s say these shares which you invested in (with post-tax money) pay you a dividend. Now that dividend gets taxed at 35%.
Then you sell those shares and pay a 24% tax on the gain.
Why does the government get a double dip on your investment income? They already hit it the first time when you earned it, so why are they hitting it again after you invested it?
Let’s also not forget the sales taxes and VAT’s all day long. Or the ‘congestion charge’ or the ‘ultra low emission zone charge’ or the growing 20 mph speed limit zones with speed cameras. Do you know how hard it is to drive under 20 mph? It’s constant annoying harassment to not have a car for the sake of the environment.
Now say you go one like this all your life, a tax donkey, and manage to save over £325,000, but then you die. After the funeral service is over the UK government will take 40% of everything over £325,000.
Yes, another 40% swipe after you die. ‘Thank you for your energy and hard work. You will be missed.’
60% of everything you ever made your entire life went to a mindless entity which doesn’t care about you or listen to you.
As long as you are happy to earn less than £50,000/year and don’t try to accumulate more than £325,000 over your entire life you are fine. Try to accumulate wealth and you instantly run into in quick sand. It’s what Michael Green calls the Valley of Death.
But that’s not enough. It never is.
The new Labor government wants to lower the starting valuation point for the ‘mansion tax’ from £2mn to £1.5mn. In London there are a lot of houses you would not consider ‘mansions’ which cost £1.5 million. That really starts to cut into upper middle class. This is on top of an earlier decision that parents should pay 20% VAT (sales tax) on private school fees. Ouch.
You can try to be clever and set up a company, own shares in it and pay yourself a dividend, but it all works out the same. Roughly 50% of what you make, no matter which way, goes to the government in round one. With repeated 30% slices thereafter for the rest of your life until you die.
That’s the one end of the burning candle.
Then the other of the candle is what you get for your 50% pound of flesh.
There are some really good public schools in the UK, but it’s getting harder and harder to get into them. There is a large allocation to international students and disproportionate admissions for low income students. If you are middle of the road income and not ‘diverse’ your odds are poor.
‘I’ve heard Durham is a good school’…
I’d say the healthcare system is pretty good, but I have to caveat that I’ve never had an emergency and I’m not old. So it’s been easy clinic type stuff.
There also isn’t really any new infrastructure to point to. Maybe a new tube line every 20 years. Basically, it’s all old and quaint. Maybe there are new roads somewhere, but you get taxed every time you move your car so what’s the point?
So you put your head down and push on because others before you have made it. Surely, there will be light on the other side of the Valley of Death.
Bothering you though is this increasing discussion of wealth taxes. Taxes on the value of assets as well as income. Across Europe, the UK and the US it’s a trend. The Netherlands already went ahead with it. You think you have it figured, out how to accumulate some wealth by owning stocks and not selling them, but then they come and tax that too.
It’s bothersome because it signals you may never come out the other side. You are tax slave. You are a slave who is supposed to be grateful for what you have and not complain about how much you are getting squeezed because of ‘those less fortunate than you’. Except, every now and then you get a glimpse of how the guilt trip around ‘those less fortunate than you’ is full of fraud and scams.
You are supposed to not mind the wealth taxes because politicians promise it will only be the 0.1%, and that it’s not you they are targeting (yet). But it’s always the ‘thin end of the wedge’ as they say. Because wealth tax enforcement starts with reporting. Everyone needs to report their entire net worth; all assets, not just income. Fill out the form. How much is your house worth. How much is your stock portfolio worth? Do you own any art? List all your properties. Then when the tax authorities have the full picture they can review the data and decide the exact amount you owe. Today it’s the 0.1%. Tomorrow it’s the top 10%. Or, tomorrow it’s high rate for the top 10% and a ‘reasonable’ rate for you.
It never stops.
Thank you tax donkey.
I’m sorry for complaining.
I’m trying to communicate a theme.
A frustration which is building.
Across the world, one by one; in the US, the UK, and Europe the middle, upper class and wealthy realise the system is not fair. There is no appreciation for the disproportionate contribution they are making to the tax bill. Instead it is non-stop attack and criticism that it isn’t enough.
And things are likely to get worse.
A growing concern for the upper middle class that the door might be closing on them.
And after the door closes they slowly get ground to dust.
Like Boxer the horse.
They realise they need to make a plan and get going now.
Any goal to accumulate substantial wealth is going to have to involve a low tax jurisdiction strategy. Low-tax jurisdictions are not just for the super rich anymore. It’s an upper middle class need as well. And you need to start now. Dr Ben Tippet’s UK wealth tax proposal (above) will be enforced 10 years after you leave the UK.
This problem of too much debt, a narrow tax base which gets squeezed, is a global trend. There are millions of wealthy people across the Europe, the UK and the US who will realise they need to start the process of building up activity and residence in a low tax jurisdiction.
Hong Kong, Singapore, Monaco, Puerto Rico, Cayman Islands, and Dubai are all going to benefit. But, in my view, only Dubai can handle the volume which will be involved. Dubai is a 5 million person city which could be going to 10 million. A new London.
This is reason #1 Dubai is going to go supersonic.
Reason #2: Dubai is becoming cool.
I’ve been going to Dubai for 20 years.
My first visit was in 2007 right before the huge property crash. They were still building the Burj Khalifa (Dubai). We were investing in a new Dubai futures exchange (DGCX).
I remember visiting Jumeriah Lake Towers when 84 towers were under construction at the same time. To my Western mind it was unimaginable to construct 84 office towers at once. Between the towers were large open spaces with tarps laid out over the sand which were going to be lakes. I was blown away. So was John Burbank. Within 10 min of landing he texted that we needed to have an office in Dubai. The city made an impression on us that quickly.
Later in 2010 after the crash I was in Dubai working on a project. For 2 months I used to walk around the empty construction sites. On Saturdays I would walk to Ibn Battuta Mall and watch movies. It was a real low point for the city.
Then over the next decade I would visit for short layovers on the way to Africa. I would notice the big billboards of new projects under development and how previous projects I remembered as concrete shells (Dubai Mall and Dubai Marina) were now alive and bustling with activity. The city was growing.
Then recently I visited Dubai again. The first time since 2019 and was truly surprised at how much it had changed. Yes, there were a few more buildings, and Business Bay has really filled in, but more it was that for the first time there was a hustle, bustle feeling when you landed and took a taxi from the airport. It was a bit like JFK. There was a feeling that you were in a real city with real people. A city with a pulse. Not a fake picture on a billboard.
For fun I stayed at the Five Palm Jumeriah. You can stay anywhere you want right now for $150/night. The Five Palm Jumeirah had a cool vibe and reminded me of The Standard in LA. One of my favourite hotels. Yes, everyone was ridiculous and trying too hard to be cool, but it was fine. The DJ’s were good, the food was great, and the night time skyline was filled with the blinking lights of cranes building something new for the future. As if to say ‘Come back soon and check out the new things we have built!’
It kind of makes sense to compare Dubai with LA.
If you look at a map of Dubai you see it is surrounded by billions of people in Africa and South Asia. These billions of Global South youth want to move up in the world and enjoy the good life. Like Americans who would Head West to California in search of their dreams,these youth come to Dubai. They want to be the first person in their family to have a fancy car, wear a fancy watch, stay at nice hotels and drink expensive cocktails. They are hungry for it. And that’s good.
How we make money.
We have these two forces.
Millions of wealthy Americans, European and Brits searching for a place where they can retain more of that they create. Although fair to say it will probably be mostly Europeans and Brits who gravitate to Dubai.
Then billions of emerging market consumers looking for a taste of the good life and willing to work like crazy to get it.
And these two forces slam together in Dubai.
Opportunity and money.
Opportunity, money and property.
That is the trade.
Emaar Properties.
A global Elysium Trade.
I could tell you what a ‘good’ company Emaar Properties. How it is the premier property developer in Dubai with the best reputation. I could tell you how it is trading at a 61% discount to appraisal value, a 9% dividend yield and 7x earnings with no debt.
It is all those things.
Source:Emaar Q2 2026 Investor PresentationI could explain how the ‘Emaar’ brand on top of the most beautiful towers across Dubai is day by day burning itself into the minds of billions of Global South consumers who dream of one day owning an ‘Emaar’ property. It is a new luxury brand.
But really the trade is to appreciate the size of the wave of hungry workers and entrepreneurs across the West looking to escape tax tyranny and to realise the very few doors for them to go through.
Dubai is the most obvious door and the most open. It’s English speaking, and has an economy which is growing. There are things to do from tech to finance. You can build a business. It’s not a bunch of retired hedge fund guys on an island in the Caribbean. With Dubai’s growth has also come an acceptance that it is a real city with a real economy and not just a tax dodge.
Dubai will check the boxes for many people. It will be the start of a new future for them. They will come to Dubai and will want a nice house. They will want to shop in air conditioned malls on the weekends.
Emaar is a good way to monetise all of this. Property development, malls, hotels, entertainment and services. Plus, enough undeveloped land for the next 12 years.
And it’s currently on sale.
Nobody knows the future of the Iran War. It could end quickly, it could go on for years. But Dubai is on a growth trend which is hard to dislodge.
If we are willing to be patient and sit through the volatility, it’s probably a good trade to take advantage of the weakness and buy into the city of the future.