Real Property Taxes in Europe August 6, 2020 A. Kristina Zvinys A. Kristina Zvinys Early property taxes, which were first implemented in feudal times, were levied primarily against land. Hence, property tax was paid mostly by those that worked as farmers. In modern times, property tax is also levied against assets like real estate. The tax is paid on a recurrent basis on property owned by individuals or legal entities. High property taxes levied not only on land but also on buildings and structures can discourage investment because they disincentivise investing in infrastructure, which businesses would have to pay additional tax on. For this reason, it may also influence business location decisions away from places with high property tax. Nineteen of the 27 countries covered allow businesses to deduct property or land tax from corporate income, which mitigates the tax burden of the tax and encourages businesses to invest. Luxembourg has the lowest property tax as a share of private capital stock, at 0.05 percent. Switzerland has the second-lowest share, at 0.08 percent, followed by the Czech Republic and Austria, both at 0.09 percent. The highest property taxes as a share of the private capital stock occur in the United Kingdom (1.93 percent), France (1.25 percent), and Greece (1.09 percent). Estonia is the only country in this map which taxes only land, meaning that its real property tax is the most efficient. Real Property Taxes in European OECD Countries, as of 2018 Country Property Tax as Share of Private Capital Stock Real Property or Land Tax Real Property or Land Taxes Deductible from Corporate Income Tax Austria (AT) 0.09% Tax on Real Property No Belgium (BE) 0.55% Tax on Real Property (a) Yes Czech Republic (CZ) 0.09% Tax on Real Property Yes Denmark (DK) 0.71% Tax on Real Property Yes Estonia (EE) 0.13% Land Tax No Finland (FI) 0.36% Tax on Real Property Yes France (FR) 1.25% Tax on Real Property Yes Germany (DE) 0.20% Tax on Real Property Yes Greece (GR) 1.09% Tax on Real Property No Hungary (HU) 0.29% Tax on Real Property No Iceland (IS) 1.02% Tax on Real Property No Ireland (IE) 0.37% Tax on Real Property Yes Italy (IT) 0.58% Tax on Real Property No Latvia (LV) 0.41% Tax on Real Property Yes Lithuania (LT) 0.20% Tax on Real Property Yes Luxembourg (LU) 0.05% Tax on Real Property Yes Netherlands (NL) 0.53% Tax on Real Property Yes Norway (NO) 0.23% Tax on Real Property Yes Poland (PL) 0.91% Tax on Real Property Yes Portugal (PT) 0.43% Tax on Real Property Yes Slovak Republic (SK) 0.22% Tax on Real Property Yes Slovenia (SI) 0.26% Tax on Real Property No Spain (ES) 0.52% Tax on Real Property No Sweden (SE) 0.35% Tax on Real Property Yes Switzerland (CH) 0.08% Tax on Real Property Yes Turkey (TR) 0.13% Tax on Real Property Yes United Kingdom (GB) 1.93% Tax on Real Property Yes Note: (a) Tax on the imputed rent of properties. Applies to machinery. Source: Calculations for “Property Tax as Share of Private Capital Stock” are based on 2018 data from OECD, “Global Revenue Statistics Database: 4100 Recurrent taxes on immovable property,” last updated July 2020, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL; and IMF, “Investment and Capital Stock Dataset: Private capital stock (current cost),” https://www.imf.org/external/np/fad/publicinvestment/#5. For the type of property tax and whether it is deductible, see PwC, “Worldwide Tax Summaries,” https://taxsummaries.pwc.com/ (2020 data). Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Global Tax Policy Business Property Taxes Business Taxes Data European Union (EU) Global Tax Maps Individual and Consumption Taxes Property Taxes
