Louis Vuitton, Dior, Gucci and other major luxury houses recorded double-digit declines in July, as Beijing’s tightening scrutiny of offshore wealth puts fresh pressure on high-end consumption.

Luxury spending in China took a sharp turn in July, with sales across the country’s 25 biggest luxury labels falling more than 10%, according to three research firms surveyed by Bloomberg.

The decline marks a reversal from the recovery seen earlier this year. According to Bloomberg‘s reporting, Louis Vuitton and Dior, owned by LVMH, alongside Kering-owned Gucci, Bottega Veneta and Balenciaga, all recorded double-digit sales declines during the month. Hermès moved from growth into decline, while growth at Chanel and Prada slowed significantly.

The pullback comes as Beijing steps up efforts to tax offshore wealth and investment income held by Chinese citizens. Reuters reported this week that new rules introduced in July impose a 20% tax on the appreciation of assets transferred into offshore trusts, while income generated by trusts and entities they control is also subject to a 20% annual tax. The changes potentially touch some US$1.2 trillion in offshore wealth held by mainland Chinese high-net-worth individuals, according to BCG estimates cited by Reuters.

The measures arrive just as China’s luxury market had begun showing signs of stabilisation. Bain & Company found that mainland China’s personal luxury goods market contracted between 3% and 5% in 2025, but began recovering in the third quarter. It had forecast modest growth for 2026, albeit with continued volatility.

The latest slowdown suggests that recovery remains fragile. Alongside the tax push, Bloomberg points to falling equity markets and weaker activity among Macau’s high rollers as signs of mounting pressure on affluent consumers, an increasingly important cohort as China’s middle-class luxury spending remains subdued.

For luxury houses that had been banking on China returning as a growth engine in 2026, July’s numbers introduce a new complication: the consumers most capable of driving that recovery are now facing greater scrutiny over the wealth that enables it.