& others
Investigate Europe
2023
🏛️ Context and Publisher This summary addresses the issue of inflated housing prices in Europe, driven by significant tax privileges afforded to real estate investments. The investigation was conducted by Investigate Europe, a collaborative journalism initiative focused on in-depth analysis of pressing issues affecting the continent. The article was published on February 7, 2023. 💰 Tax Benefits for Real Estate European governments provide substantial tax benefits to real estate investors and owners, creating a common policy across member states despite political differences. Investigate Europe’s team analyzed the taxation systems and loopholes for real estate investments in various countries, revealing that billions of euros are attracted to an already overheated real estate market. 🌍 Countries with Favorable Tax Regimes The investigation identified that countries including Austria, Belgium, France, Germany, Greece, Hungary, Italy, Norway, Portugal, Spain, Sweden, and the UK have tax regimes that disproportionately favor real estate investments over other business types. Common privileges include complete exemptions on capital gains, tax-free guarantees for investment funds, and lower taxation on rental income compared to other profit types. These tax policies contribute to the under-taxation of both commercial and residential real estate. 📊 Findings on Tax Avoidance Economists, tax experts, and legal professionals interviewed by Investigate Europe reached a consensus that real estate is generally under-taxed or untaxed in many European nations. The investigation uncovered various tax avoidance schemes utilized by real estate investors. However, due to the lack of European regulation or oversight, establishing consistent patterns of tax avoidance remains challenging. 💸 Economic Impact of Tax Exemptions The research highlights significant misallocation of capital in member states such as Germany, Italy, Portugal, and Belgium, amounting to billions of euros that could otherwise support sustainable housing initiatives. The findings underline the urgent need for policy reevaluation in order to address the implications of these tax privileges on the housing market and promote a more equitable and sustainable approach to housing in Europe.
European governments give huge tax benefits to real estate investors and owners - a policy that is common in many member states despite all political differences. Over the past months, Investigate Europe’s team analysed the taxation and loopholes for real estate investments in several European countries. This lures billions of euros to the overheated real estate market . The investigation found that Austria, Belgium, France, Germany, Greece, Hungary, Italy, Norway, Portugal, Spain, Sweden and the UK all have tax regimes that favour certain kind of real estate investments more than other types of business or investments. The most common privileges include full exemptions on capital gains, special free-tax guarantees for funds, and rent income taxed lower than other types of profits. Economists, tax experts, lawyers and organisations interviewed by IE reporters arrive to a clear conclusion: real estate, both commercial and residential, is under-taxed or untaxed in most countries. The investigation reveals several examples of tax avoidance schemes by real estate investors. There is no European regulation nor oversight, so patterns are hard to prove. Still Investigate Europe’s research shows misallocation of capital in member states like Germany, Italy, Portugal or Belgium to the tune of billions of Euros due to these exemptions.