Taxand T3 (Total Tax Take) research conducted by Taxand, the world’s largest independent organisation of tax advisors to multinational businesses, has shown that the UK is one of the cheapest countries for investors involved in residential and commercial property rental investments, when considering the total tax take.
The UK has a total tax rate of 9.35% on rental investments, the third lowest and only beaten by Poland and Romania which have an overall rate of 9.28% and 7.61% respectively. The UK stands in stark contrast to those countries at the other end of the table, such as Greece, which has a total tax take of 30.71% or South Africa with 24.17% on residential rent.
Furthermore the UK’s overall tax rate for rental investments is second lowest in the table at 7.18% making the UK very attractive overall for tax rate in commercial significantly more attractive when compared to South Africa, which has the highest rate in this category of 19.58%.
The T3 research analyses the tax take for real estate investors across two asset classes: residential for rent; and commercial for rent, across 23 countries around the world. The highest and lowest tax take rankings are:
| Asset Type | Highest Tax Take | Average | Lowest Tax Take |
|---|---|---|---|
| Residential for rent | Greece (30.71%) | 16.55% | Romania (7.61%) |
| Commercial for rent | South Africa (19.58%) | 14.87% | Indonesia (3.15%) |
More generally, some European countries appears to offer some of the most attractive total tax rates for real estate investment, with Sweden, Romania and Poland amongst the cheapest across the two segments analysed in the research. However, others in Europe were among the most expensive, with Spain in the commercial for rent category and Greece and France for residential for rent.
The research also presented the following key findings:
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The research highlights the fact that the UK continues to be an attractive destination for property developers and investors, primarily because of its low corporate tax rate – currently just 20%.
