Reliance on Property Taxes in Europe

May 30, 2019

Elke Asen

Elke Asen

A recent report compares to what extent OECD countries rely on various tax revenue sources. Today’s map looks at property tax revenue, which, compared to other taxes, accounts for a relatively small share of total tax revenue in Europe. In 2017, property taxes accounted for only 4.6 percent of tax revenue on average in the 27 European countries covered in this map.

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 on land and buildings) the only one levied by all covered countries. Other types of property taxes include estate, inheritance, and gift taxes, net wealth taxes, and taxes on financial and capital transactions.

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The United Kingdom relied the most on property taxes in 2017, at 12.6 percent of total tax revenue. Luxembourg and France were next, at 9.6 percent and 9.5 percent, respectively.

Estonia had the lowest reliance on property taxes, at only 0.7 percent of total tax revenue, with Austria, Lithuania, and the Slovak Republic all at 1.3 percent.

Note: This is part of a map series in which we examine tax revenue sources in Europe.

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A 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.

A 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.

A 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.

A 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.