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Poland Topping Table Of Least Expensive Countries To Sell Your Home In

Poland Topping Table Of Least Expensive Countries 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 Poland is one of the least expensive countries in the World in which to sell a residential property, with just over 11% (11.04%) of the value swallowed by tax.

The tax rate is the third lowest of the 23 countries analysed in the research but is still more than two times the tax rate in Malaysia which topped the table with a rate of 5.40% when selling a residential property. Other countries with a considerably low total tax take for the sale of homes included the UK (6.39%), Luxembourg (11.68%) and India (12.09%).

This low tax take on a residential property sale in Poland is predominantly the result of the low rate of income tax combined with a relatively low VAT rate on residential sales, standing at just 7%. This is a significant factor for property investors to consider when looking to generate the greatest return on investment given the exorbitant tax rates of some neighbouring European jurisdictions.

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 boasting relatively high tax rates for the sale of residential property with rates of 20.87%, 19.82%, and 18.92% respectively.

Pawe? To?ski, Partner with Accreo Taxand in Poland, said: "The low tax take on home sales reflects the commitment of the Polish government in encouraging residential property development and improving the market so as to increase home ownership. The high cost of purchasing apartments has historically been a problem in the country so this research goes a long way in showing that the government's goals are being achieved, at least in the area of tax."

Keith O'Donnell, Global Head of Real Estate, at 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 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

Taxand's Take Author