Investigate Europe
Investigate Europe
2023
📜 Context The investigation project titled “Untaxed” is conducted by Investigate Europe, a journalistic organization focused on in-depth reporting on significant issues affecting Europe. This investigation sheds light on how various European governments incentivize real estate investment through substantial tax benefits, exacerbating the ongoing housing crisis across the continent. 🏘️ Tax Benefits and Loopholes The investigation reveals that multiple European countries, including Austria, Belgium, France, Germany, Greece, Hungary, Italy, Norway, Portugal, Spain, Sweden, and the UK, maintain tax regimes that favor specific types of real estate investments. These regimes often include full exemptions on capital gains, tax-free guarantees for funds, and preferential tax rates on rental income compared to other profit types. Such policies lure billions of euros into the already overheated real estate market, creating a significant misallocation of capital within these member states. 📈 Economic Consequences Economists, tax experts, and legal professionals interviewed as part of the investigation unanimously agree that real estate—both commercial and residential—is either under-taxed or untaxed in most European countries. This situation has direct implications for the housing market, driving up prices and contributing to the housing crisis. Data indicates that, apart from Italy and Malta, house prices in all other EU countries have increased since 2010 at rates surpassing inflation and average wage growth. This trend also extends to Norway and the UK, highlighting a widespread issue across Europe. 🌍 Social Impact The findings indicate that in cities like Prague, Bratislava, and Paris, it now takes more than 20 years of average wages to purchase a flat. This alarming statistic underscores the growing divide between income levels and housing affordability. Investigate Europe has gathered testimonies from individuals affected by the housing crisis, revealing the human stories behind the statistics. The organization also confronted national governments regarding the social costs associated with these tax privileges, aiming to raise awareness and incite discussion on the urgent need for reforms in housing policies throughout Europe. 🔍 Conclusion The “Untaxed” investigation illustrates the critical intersection between tax policy and housing affordability in Europe. By uncovering the systemic issues that allow for such tax advantages, Investigate Europe aims to foster a dialogue about sustainable housing solutions and the necessity for equitable taxation in real estate to protect the interests of vulnerable populations across the continent.
About the investigation project “untaxed”
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 our 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. This has direct social consequences: capital is lured into real estate, drives up prices, and by this contributes to the escalating housing crisis in many European countries. Statistics show that in all other EU countries apart from Italy and Malta, house prices rose from 2010 at rates that were higher than inflation or average wage growth. This is also true for Norway and UK as Investigate Europe’s findings show. In European cities like Prague, Bratislava and Paris, it will take more than 20 years of average wages to buy a flat. Investigate Europe spoke to people behind the figures and victims of the housing crisis in many European countries. The reporters also confronted national governments with the tax privileges and their social costs. Read those findings, human stories and political answers in our new investigation.