British Expats considering moving to Europe are likely to have to pay some of the world’s highest property taxes if they decide to buy a home or investment property, and almost certainly more than they would pay in UK Property Tax for the equivalent transaction at home.
A recently released survey from UHY, an accounting and consultancy network, has produced a ranking that shows how much buyers must pay in tax for a home worth 1 million USD in 26 different global property markets. The results show that the European average is 3.8 per cent of the buying price (38,356 USD), while the global average is 3.3 per cent of the buying price (33,038 USD).
UK PROPERTY TAX BELOW EUROPEAN AVERAGE
UK Property Tax is in mid-table at 11th position. Taxes on property purchases amount to 3.5 per cent of the value of a home on average (35,383 USD) in the UK. This places it below the European Average, but above the Global Average mark.
The most expensive place surveyed to buy a home in is Belgium, where tax will be as high as 11.3 per cent of the property value (113,131 USD on a 1 million USD property).
Behind Belgium in the top 10 are Spain, France, Germany, Croatia, Malta, Pakistan, India, Australia and Uruguay. New Zealand and Russia were revealed as the cheapest place to buy – in both cases there are ZERO taxes applied to property purchases.
Higher property purchase taxes can put a strain, given house price inflation in some locations over the last decade or two, on domestic buyers who may not actually be particularly wealthy.
USA SHOWS RESTRAINT ON PROPERTY TAX
The USA is low at 23rd place. Taxes of 0.5 per cent will apply there.
The publishers UHY commented that many economies risk over-exploiting property purchase taxes as a way to bolster finances, adding that it was encouraging to see that the US exercises restraint in this regard.
A representative from the company said: “The United States has one of the lowest tax rates in our study. The low level of tax enables home owners to move more freely from city to city and now, the US is seen as having enviable labour market mobility.”
The rankings from the survey (based on a 1 million USD property purchase) were as follows:
COUNTRY RANKING BY TAX RATE (%)
- Belgium (11.3)
- Spain (8.0)
- Pakistan (6.0)
- France (5.9)
- India (5.0)
- Croatia (5.0)
- Germany (5.0)
- Malta (5.0)
- Australia (4.8)
- Uruguay (4.0)
- UK (3.5)
- Japan (3.0)
- Israel (2.7)
- Denmark (2.1)
- China (2.1)
- Poland (2.0)
- Brazil (2.0)
- Mexico (2.0)
- Netherlands (2.0)
- Canada (1.8)
- Italy (1.7)
- Ireland (1.0)
- USA (0.6)
- Romania (0.2)
- Russia (0.0)
- New Zealand (0.0)