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

UK 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 the UK is one of the least expensive countries in the World in which to sell a residential property, with less than 7% (6.39%) of the value swallowed by tax.

The tax rate is the second lowest of the 23 countries analysed in the research and is only a fraction behind Malaysia which topped the table with a rate of 5.40%; well ahead of other major European economies such as Germany, France, Italy and Spain. Other countries with a considerably low total tax take for the sale of homes included Poland (11.04%), Luxembourg (11.68%) and India (12.09%).

This extremely low tax take on a residential property sale in the UK is predominantly the result of (the low rate of income tax combined with a relatively low VAT rate on residential sales), and 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.

Keith O'Donnell of Taxand, said: "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."

Also featured in the Financial Times, 27 May 2011

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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