2023
Investigate Europe Team and others
European governments are inflating housing prices through significant tax benefits for real estate investors and property owners, a practice prevalent across various member states. Investigate Europe’s analysis revealed that countries such as Austria, Belgium, France, Germany, and others provide tax regimes that disproportionately favor real estate investments over other business sectors. Common privileges include exemptions on capital gains, tax-free guarantees for funds, and lower taxation on rental income. Experts agree that real estate is largely under-taxed or exempt from taxation in many regions. The investigation uncovered multiple tax avoidance schemes utilized by investors, exacerbated by the absence of European regulations or oversight, making it challenging to identify patterns of abuse. As a result, there is a significant misallocation of capital, particularly in nations like Germany, Italy, and Portugal, amounting to billions of euros due to these advantageous tax exemptions.
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.