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Malaysia Tops Table As Least Expensive Country To Sell Your Home In

Malaysia Tops Table As Least Expensive Country To Sell Your Home In

Research conducted by Taxand, the world's largest independent global network of specialist tax advisors to multinational businesses, has shown that Malaysia is the least expensive country in the World in which to sell a residential property, with less than 6% of the value swallowed by tax.

The tax rate (5.40%) is the lowest of the 23 countries analysed in the research and is well below the rates of other major Asian economies such as India and China ranked 5th and 16th respectively. Other countries with a considerably low total tax take for the sale of homes included the UK (6.39%), Poland (11.04%), and Luxembourg (11.68%).

This extremely low tax take on a residential property sale in Malaysia is predominantly the result of the low rate of tax combined with the absence of VAT/GST on residential sales that are made outside of a business context. This is a significant factor for property buyers to consider when looking at purchases in the country given the exorbitant tax rates of many other jurisdictions across the globe.

On the other end of the scale, the research identifies France as the most expensive location to sell a residential property where the tax take from the income of the sale stands at a astoundingly high rate of 22.03% and the Netherlands is not far behind with a total tax take of 21.25%.

Portugal, Germany, and Turkey are countries also implementing relatively high tax rates for the sale of residential property with rates of 20.87%, 19.82%, and 18.92% respectively.

Dr. Veerinderjeet Singh, Managing Director of Taxand Malaysia, said: "Real estate prices in Malaysia are some of the lowest in the region and this research goes far in explaining some of the reasoning behind this. The current absence of VAT/GST for residential home buyers is a key factor in maintaining an attractively low tax take and does much to encourage ownership in the country."

Keith O'Donnell, Global Head of Real Estate for Taxand, also commented: "Our research throws up some interesting trends with regards to residential property within Europe as well as worldwide. Perhaps most interesting is the disparity shown in the rates within Western Europe with France topping the list alongside the Netherlands, Portugal, and Germany."

"Property investors may well be surprised by these results and in light of them consider a shift in their investment portfolios to less tax-heavy jurisdictions in order to boost overall profits. Certainly, with governments expected to reverse previous tax concessions in order to generate revenue, a growing number of investors could be tempted by the attractiveness of countries already exhibiting a lower government tax take."

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Research methodology

To arrive at the figures, Taxand has taken into account VAT (or its local equivalent), corporate income tax, and property taxes. The property taxes were usually subject to various country specific assumptions and modifications as they often differ on a municipality basis or sometimes just location basis.

Those were reviewed by the coordinating Taxand team to assure comparability. Administrative fees, notary fees, court fees were excluded as having a relatively low impact on the overall tax take.

To ensure comparability of the results, certain data has been fixed such as size of the building, investment costs, and 100 percent non-interest bearing equity financing. With all of that built into the model, each real estate team from Taxand adopted it to the local law to ensure comparability.

Your Taxand contact for further queries is:
Abigail Tarren, Global Operations Director
T. +44 (0)207715 5243


Taxand's Take

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