The T3 (Total Tax Take) research conducted by Taxand, the world’s largest independent organisation of tax advisors, reveals a dichotomy in Europe as it appears as both one of the most expensive but also cheapest region for real estate investors, illustrating the wide tax fluctuations between European countries.
The T3 research analyses the tax take for rental real estate investors across two asset classes: residential rental and commercial rental, across 23 countries around the world. The top five across both asset categories are Greece, South Africa, France, Mexico and Spain for residential rental and South Africa, Mexico, Spain, Colombia and Switzerland for commercial rental. However, at the other end of the scale, Romania, Poland and UK have the lowest tax takes for residential rental, Indonesia, UK and Romania have the lowest rates for commercial rent tax take.
|Asset Type||Highest Tax Take||Average||Lowest Tax Take|
|Residential rental||Greece (30.71%)||16.55%||Indonesia (3.15%)|
|Commercial rental||South Africa (19.58%)||14.87%||Romania (7.61%)|
The findings show South Africa is the second most expensive place for residential rental taxes, with a rate of 24.17%. While the rental demand is high in South Africa allowing landlords to achieve high annual returns, non-resident investors in South Africa have to pay Capital Gains Tax when they later sell their properties.
The research also presented the following key findings:
Taxand’s T3 research has produced thought-provoking findings around real estate taxation which highlights a number of global trends in rental investment arena. The results demonstrate an increasing widening of tax rates when it comes to rental property.