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Spain Tops Rankings As Most Expensive Country For Healthcare Property Investors

Spain Tops Rankings As Most Expensive Country For Healthcare Property Investors

Taxand T3 (Total Tax Take) research, conducted by Taxand, the world's largest global organisation of tax advisors to multinational businesses, has shown that Spain is the most expensive country in the world in which to invest in healthcare-related property, such as hospitals, care homes or medical offices, with a massive 41.59% of income swallowed by tax.

Spain is also positioned in the top ten most expensive countries in the world for tax taken in other areas of real estate, namely buy-to-let property, selling a house or flat and investing in commercial property. However it offers a concession in the tax take on selling commercial property, currently 8.02%, which is below the average global rate of 9.50%.

Spain has high taxation on healthcare and other property due to its high level of corporate income tax, which is 30%, and the significant indirect taxes applied by the Autonomous Community Governments, such as Transfer and Stamp Duty Taxes which are due upon acquisition of the land plot and declaration of the new construction. Moreover, several local taxes that do not exist in other countries add to the weight of the total tax cost

Spain ranks as follows in the Taxand rankings for tax taken on property investment and property sales:

  • No 1 for healthcare property with 41.59% of income taken by tax. The USA follows on Spain's lead at 41.17% whilst the global average is 31.66%
  • No 8 for commercial property investment with 31.22% of income taken by tax. The global average is 25.40% (please note we haven't made reference to Canada being the most expensive jurisdiction)
  • No 8 for apartment sales with 17.39% of the sale taken by tax. Romania is the most expensive country in which to sell an apartment, with 21.60% of the sale taken by tax. The global average is 14.61%
  • No 9 for home sales with 17.53% of the sale taken by tax. Romania is also the most expensive country in which to sell a home; the global average is 16.18%
  • No 9 for buy-to-let property (home for rent) with 36.22% of the income taken by tax. China is the most expensive country for buy to let investments at 50%, with the global average coming in as 32.54%
  • No 12 and below average for the tax taken on commercial property sales. Spain ranks at 8.02% and the global average is 9.5% with Norway leading the table with 21.8%

The Taxand T3 research into the real estate market was conducted across 23 countries across the globe.

Keith O'Donnell, Global Head of Real Estate, at Taxand said:

"Our research shows us that Spain lies broadly across the upper end of global taxation levels, with only tax on commercial property sales providing any kind of respite for property investors. Largely due to Spain's high corporate tax rate of 30%, Spain's inflated level of tax on healthcare property is concerning at nearly 10% more than the average tax take in this area."

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NOTES TO EDITORS
Taxand T3 research methodology
Taxand has updated and expanded its T3 data.

To arrive at the figures, Taxand has taken into account VAT (or its local equivalent), corporate income tax, and property taxes based on 2010 rates. The property taxes were usually subject to various country-specific assumptions and modifications as they often differ on municipality basis or sometime 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, Taxanders adopted it to the local law.

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

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