Investigate Europe
Investigate Europe
2023
🏛️ Context and Background This article was published by Investigate Europe on February 7, 2023, and it explores the impact of tax privileges on the housing market across various European countries. Investigate Europe is known for its in-depth investigative journalism, focusing on uncovering significant issues affecting European societies. The team conducted a comprehensive analysis of taxation and loopholes pertaining to real estate investments, revealing how government policies influence housing prices. 💰 Tax Privileges for Real Estate The investigation highlights that European governments provide substantial tax benefits to real estate investors and owners. This practice is widespread among member states, regardless of their political differences. The team analyzed multiple countries, including Austria, Belgium, France, Germany, Greece, Hungary, Italy, Norway, Portugal, Spain, Sweden, and the UK, uncovering a common trend of tax regimes favoring specific real estate investments over other business sectors. 📈 Common Tax Benefits Among the key findings are notable privileges such as full exemptions on capital gains, special tax guarantees for real estate funds, and lower taxation on rental income compared to other profit types. These tax policies contribute to a significant misallocation of capital in the housing market, exacerbating the issue of inflated housing prices. 📊 Under-Taxation of Real Estate The investigation indicates that real estate—both commercial and residential—is often under-taxed or completely untaxed in many countries. The team consulted economists, tax experts, and legal professionals, who unanimously concluded that the current tax structure favors real estate to an unsustainable extent. 🚫 Tax Avoidance Schemes Furthermore, the report reveals various tax avoidance schemes utilized by real estate investors. The lack of European regulation and oversight makes it challenging to identify and prove these patterns, yet the research shows that the exemptions lead to billions of euros being misallocated in countries like Germany, Italy, Portugal, and Belgium. In conclusion, the findings of this investigation underscore the critical need for a reevaluation of tax policies regarding real estate in Europe to promote sustainable housing solutions and ensure a fairer allocation of resources within the market.
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.