Investigate Europe
Investigate Europe
2023
🏢 Context of the Investigation The investigation project titled "Untaxed" by Investigate Europe sheds light on the significant tax benefits that European governments offer to real estate investors and owners. Conducted by a team of investigative journalists, this project aims to analyze taxation and loopholes in real estate investments across various European nations, revealing how these policies contribute to the ongoing housing crisis. 📊 Tax Benefits and Loopholes The investigation highlights that multiple European countries, including Austria, Belgium, France, Germany, Greece, Hungary, Italy, Norway, Portugal, Spain, Sweden, and the UK, have tax regimes that favor specific types of real estate investments over other business ventures. Reportedly, these regimes include full exemptions on capital gains, tax-free guarantees for funds, and lower taxation on rental income compared to other profits. Experts, including economists and tax professionals, have concluded that real estate investments—both commercial and residential—are often under-taxed or entirely untaxed across most member states. 💸 Economic Implications This tax favoritism leads to the misallocation of vast amounts of capital—estimated in the billions of euros—into an overheated real estate market. The findings indicate that these exemptions result in rising property prices, which directly exacerbates the housing crisis across Europe. Notably, statistics reveal that in nearly all EU countries, except Italy and Malta, house prices have outpaced inflation and average wage growth since 2010. This trend is also evident in Norway and the UK, highlighting a broader regional issue. 🏠 Social Consequences The investigation further emphasizes the social ramifications of this tax policy, illustrating that in cities like Prague, Bratislava, and Paris, it may take over 20 years of average wages to afford a flat. Investigate Europe has engaged with individuals impacted by the housing crisis, capturing their stories and perspectives. The team also confronted national governments about the social costs associated with these tax privileges, offering a comprehensive look at the real impact of these policies on communities across Europe. 🔍 Conclusions and Findings In conclusion, the investigation underscores the urgent need for a reevaluation of tax policies in relation to real estate investments. Without proper regulation and oversight at the European level, the current system perpetuates a cycle of capital misallocation, ultimately fueling the escalating housing crisis in many European countries.
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.