Living costs for high-net-worth families: Lisbon, Dubai or Singapore?

What does the cost of living for people with large assets include?

The cost of living of people with large assets is structured differently from the cost of living of an average family. Popular cost comparisons typically measure the price of food, transportation, and basic utilities; But for families with assets, these accounts account for a small proportion. The decisive components lie in taxes, luxury housing, international education and services.

Therefore, a city with a high basic cost of living is not necessarily an expensive place for people with large assets, and vice versa. Correctly understanding the composition of the cost of living for people with high assets helps compare settlement destinations in a realistic way, instead of relying on average cost indices that reflect the needs of other population groups.

Tax is the largest component

For many families, taxes are the largest component of the cost of living for the wealthy, and are also the most differentiating factor between destinations. Two cities with similar costs of living can differ greatly in tax burdens on income, assets and wealth transfers, depending on the tax system of the host country.

Because of their tax influence, settlement capitals considered by those with large assets are often compared first in this aspect. However, taxes depend on tax residence and each individual's specific circumstances, so generalizations cannot be made; A “low tax” destination in theory may not be optimal for every profile.

Luxury housing and education

After taxes, luxury housing and education are two major components of the cost of living for the wealthy. Real estate prices in the high-end segment in cities such as Lisbon, Dubai or Singapore vary significantly, and fluctuate according to market cycles and international capital inflows.

International education for children is an expense that lasts for many years and also varies greatly from place to place. For families with children, this can be equal to or surpass housing in terms of total long-term expenses. When comparing costs between settlement capitals, these two items need to be fully accounted for instead of just looking at the daily cost of living.

Compare settlement capitals

When comparing the cost of living for the wealthy between Lisbon, Dubai and Singapore, each place has a different cost profile. The bottom line is that there is no “cheapest” city for every family, because the weighting of taxes, housing and education varies depending on the asset structure and needs of each household.

A family that prioritizes low taxes may evaluate destinations differently than a family that prioritizes education or quality of life. So, the right way to compare is to build a cost framework according to your family's structure — expected taxes, housing in the segment you need, education for a specific number of children — and then put the cities next to each other.

Cost and value received

One aspect that is often overlooked when discussing the cost of living for the wealthy is the relationship between cost and value received. A higher-cost destination may come with better healthcare, security, infrastructure and stability — factors that the wealthy especially value and are willing to pay for.

Therefore, cost comparisons should not be separated from value comparisons. The lowest cost does not mean the best choice if it comes with trade-offs on factors important to the family. This is the reason why deciding where to settle for people with large assets is often a matter of balance, not simply minimizing costs.

Verify cost data

Data on the cost of living for those with high net worth should be examined with caution, as popular cost tables often reflect the average population, not the high-end segment. With items such as taxes, assessments should be based on specific circumstances; With housing and education, you need data in the right segments you are interested in.

Cost of living references can be helpful for a background picture, but should be seen as a starting point. For decisions with tax and financial factors, a qualified advisor should be consulted. This article provides a framework of considerations, not a ranking of a specific destination.