While Europe levies some of the highest property purchase taxes in the world, the UK has a relatively low property purchase tax.
Europe levies some of the highest taxes on the purchase of prime property, charging an average 4% in taxes on a purchase of US$1 million (equivalent £765,000), according to a new study released by UHY, an international accounting and consultancy network.
UHY says that major European economies including France (5.1%), Germany (5.0%), and Spain (8%) levy high property purchase taxes, while Belgium ranks the highest at a whopping 11.3% for real estate worth £765,000.
The United Kingdom, meanwhile, sports a relatively low property purchase tax at 3.5%. UK’s property purchase tax is lower than the European average (3.8%) and higher than the global average by only 0.2%. UK’s property purchase tax is also lower than Australia (4.8%), Pakistan (6.0%), India (5.0%) and Croatia (5.0%).
The low property purchase tax is a blessing for high-performing countries like the UK, which has an acute under supply of housing. Low property purchase tax also helps spur inward investment from foreign investors.
UHY says that although high property tax is an attractive source of revenue for governments, it could discourage labour market mobility and valuable overseas investment. Higher property purchase taxes also puts a strain on domestic buyers, who may not actually be particularly wealthy, given house price inflation in some locations over the last decade or two.
Article originally published at http://bit.ly/2a7XAyF
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