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Property taxes in Europe in 2024. Countries with high and low property taxes
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Real estate has always been and remains one of the most popular and profitable forms of investment. However, when purchasing real estate, it is necessary to consider not only its cost and potential profitability but also the tax burden that the owner will have to bear annually.
Annual property tax is a mandatory payment that property owners must pay to the government or local authorities for the right to own and use real estate. The tax rate and rules for its collection can vary significantly in different countries and even in different regions within one country.
High rates of annual property tax can significantly increase operating expenses for owning real estate, which can substantially reduce the investment’s profitability. Therefore, when assessing the investment attractiveness of a particular country or region, it is important to consider not only the property tax burden at the time of purchase but also its annual ownership cost.
In which countries property taxes are absent
Annual property tax is levied in most countries, however, in the European Union, there are countries where annual property tax is absent, making them particularly attractive for investors.
Currently, some European Union countries offer such favorable conditions for property owners, among them Cyprus and Malta.
Cyprus does not have an annual property tax, making this island particularly attractive for investors. Property owners in Cyprus are not burdened with additional expenses for taxes on ownership and use of their property. This creates favorable conditions for investors looking to minimize operating costs and maximize the profitability of their real estate investments. Taking all these factors into account, Cyprus emerges as one of the leaders among countries for profitable real estate investment.
Malta – Another European Union country where no annual property tax is levied. In these countries, property owners are exempt from having to pay taxes solely for owning property. This allows investors to focus on potential returns and property appreciation without additional financial burdens.
Property Taxes in EU Countries
We have identified the most sought-after countries for real estate purchases in the European Union, and below you can familiarize yourself with the rates of annual property tax.
Please note that the level of property taxes and the rules for their collection may vary depending on the specific region and the type of property.
Spain
In Spain, the property tax is called “Impuesto sobre Bienes Inmuebles” (IBI), which is levied at the municipal level. The tax rate depends on the assessed value of the property and is set by each municipality.
The rates of annual property tax in Spain range from 0.4 to 1.3%.
Portugal
The annual property tax in Portugal, known as “Imposto Municipal sobre Imóveis” (IMI), is also levied at the municipal level and depends on the assessed value of the property.
The tax rate varies and ranges from 0.3% to 0.8% depending on the municipality and the type of property. Portuguese municipalities determine their own property tax rates.
There is also an exemption from IMI. For example, this is available for urban property undergoing reconstruction for a period of three years, with the possibility of extension.
Greece
The tax levied on ownership of Greek real estate, known as “Telos Akinitis Periousias” (TAP), is collected annually for the benefit of municipalities at the currently calculated rate ranging from 0.1% to 1.15%.
To calculate the tax rate, municipalities divide populated areas into zones with different square meter property values, taking into account factors such as area, cadastral value, and the construction date of the property.
Italy
In Italy, the property tax is called “Imposta Municipale Unica” (IMU) — a unified municipal tax collected from property owners.
The tax rate is set at 0.86%, with municipalities having the option to increase it to 1.06% or reduce it to zero.
In some cases, an additional regional property tax may also apply.
France
If you own property in France, you’ll have to pay the property tax known as “taxe foncière.”
The amount you’ll pay varies depending on the property’s value and location, as each local authority sets its own rate.
The cadastral value is reassessed every year, so the tax amount will change (depending on improvements, additions to the property, adding a pool, etc.).
For instance, if it’s your primary residence, you may be exempt from the tax. However, property tax is still levied on secondary residences at a rate of around 3% of the property’s market value.
Comparative Table of Property Taxes in the Listed Countries
Country
The annual property tax rate
Cyprus
no
Malta
no
Spain
from 0.4 to 1.3%
Portugal
from 0.3% to 0.8%
Greece
from 0.1 % to 1.15%
Italy
from 0.86% to 1.06%
France
3%
Choosing a country for real estate investment in Europe depends on many factors, including tax obligations.
Therefore, it’s important to have a comprehensive understanding of all aspects of the tax system in the chosen country before making an investment.
If you want detailed consultation, feel free to reach out to us!
Our team of real estate and tax experts is ready to provide you with all the necessary information and assistance to make informed decisions.
Don’t miss the opportunity to secure successful and secure investments with us!
Elena Georghiou – Founder and Managing Director of Feod Group. Has two higher educations: the first at the Odessa State Polytechnic University, majoring in automation and computer engineering (1986) and second in the Moscow State Law Academy, majoring in law (1991). Has work experience in London i...
Elena Georghiou – Founder and Managing Director of Feod Group. Has two higher educations: the first at the Odessa State Polytechnic University, majoring in automation and computer engineering (1986) and second in the Moscow State Law Academy, majoring in law (1991). Has work experience in London immigration law firms. Is a regular participant in seminars and trainings on immigration, corporate and private law of the European Union. Elena Georghiou has more than 25 years of legal experience and heads the specialized Residency and Citizenship practice across European countries, UK and USA advising HNWIs and their families on:
immigration planning;
consultations on obtaining alternative (second) citizenship;
Residency and Citizenship by Investment;
business immigration;
preparation of appeals, working with complex immigration cases.
She advises individuals and corporate clients for wealth/business structuring and assets protection. Central to her Managerial role in the company she initiated and united high level lawyers and other top professionals around the word in order to provide Feod Group clients with bespoke level of legal and business services word wide, keeping the staff focused on the opportunities and challenges faced by each individual client. Speaks Russian, Ukrainian, English.
Cyprus does not have an annual property tax, making this island particularly attractive for investors. Property owners in Cyprus are not burdened with additional expenses for taxes on ownership and use of their property. This creates favorable conditions for investors looking to minimize operating costs and maximize the profitability of their real estate investments. Taking all these factors into account, Cyprus emerges as one of the leaders among countries for profitable real estate investment.
Malta – Another European Union country where no annual property tax is levied. In these countries, property owners are exempt from having to pay taxes solely for owning property. This allows investors to focus on potential returns and property appreciation without additional financial burdens.
