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Reliance on Property Taxes in Europe

By: Elke Asen

A recent report outlines to what extent OECD countries rely on various taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. revenue sources. Today’s map looks at property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. revenue in European OECD countries, which, compared to other types of taxes, accounts for a relatively small share of total tax revenue. In 2018, property taxes accounted on average for only 4.6 percent of tax revenue in the 27 European OECD countries.

Property taxes are levied on the assets of an individual or business. There are different types of property taxes, with recurrent taxes on immovable property (such as property taxes on land and buildings) the only one levied by all countries covered. Other types of property taxes include estate, inheritance, and gift taxA gift tax is a tax on the transfer of property by a living individual, without payment or a valuable exchange in return. The donor, not the recipient of the gift, is typically liable for the tax. es, net wealth taxA wealth tax is imposed on an individual’s net wealth, or the market value of their total owned assets minus liabilities. A wealth tax can be narrowly or widely defined, and depending on the definition of wealth, the base for a wealth tax can vary. es, and taxes on financial and capital transactions.

Property tax reliance in Europe 2020 reliance on property taxes in Europe, property tax collections as a percent of total tax revenue in European OECD countries

The United Kingdom relied the most on property taxes in 2018, at 12.3 percent of total tax revenue. Luxembourg and France were next, at 9.8 percent and 8.9 percent, respectively.

Estonia had the lowest reliance on property taxes, at only 0.7 percent of total tax revenue, followed by Lithuania at 1.0 percent and Slovakia at 1.2 percent.

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