Executive Summary: Key Findings & Comparative Overview

This report provides a detailed examination of real estate taxation and associated costs across 44 European countries. The analysis reveals a highly fragmented landscape, with significant variations in tax policy, administrative burdens, and strategic objectives. A primary finding is the stark contrast between two distinct models: the high-tax regimes of Western and Northern Europe, which rely on substantial property-related revenues to fund public services, and the low-tax or zero-tax regimes found predominantly in Central and Eastern Europe, which employ a minimal tax burden as a tool to attract foreign investment. The report also identifies jurisdictions with highly complex, multi-layered systems (e.g., Germany, Spain, Switzerland) where tax liabilities are highly dependent on regional and local decisions. In contrast, a few nations, such as Malta and Liechtenstein, have adopted a unique zero-recurrent-tax model, which creates a highly favorable environment for long-term passive asset ownership. The total cost of a real estate transaction, including taxes and ancillary fees, can range from less than 5% of the purchase price to over 15%, a critical factor for any potential investor. The table below provides a concise comparative overview of key financial data points.

Country	Acquisition Costs (Transfer/Stamp Duty)	Annual Ownership Tax	Rental Income Tax	Capital Gains Tax	Non-Resident Specifics
Albania	2%–4%	0.05%–0.1% of assessed value	15% flat on net income	15% on profit (exempt if held >5 years) 1	Low taxes, no restrictions on foreign ownership 2
Andorra	Not specified	Not specified	Not specified	Not specified	No data available.
Austria	3.5% transfer tax, 1.1% registration fee 4	Annual property tax based on location, size, and use 4	Progressive rates from 55%	Not specified	Double taxation treaty with the US
Belarus	No transfer tax mentioned	0.1%–0.2% for individuals	Progressive rates (13%)	9% on shares in Belarusian companies	Foreign ownership is generally restricted 9
Belgium	12.5% registration duties (existing), 21% VAT (new) 10	Based on cadastral income	Progressive rates (50%)	Not specified	High revenue from immovable property taxation 13
Bosnia & Herzegovina	5% (FBiH), no tax (RS)	0.2% max (RS), leisure/rented properties (FBiH) 14	Not specified	Corporate income tax (19-25%)	No specific tax breaks for foreigners
Bulgaria	0.1%–3%	0.1%–0.45% of cadastral value	10% flat on rental income	10% on profit (exempt if held >3 years) 16	Simple and clear system for property owners 17
Croatia	3% of market value (if not subject to VAT) 18	EUR 0.60–8.00 per m²	Progressive rates	Not specified	Exemptions are not based on nationality 19
Cyprus	3-8% (transferred), 0.15-0.20% (stamp duty) 20	Varies by municipality/sewerage tax	Progressive rates	Not specified	50% reduction in transfer fees for resale properties 20
Czech Republic	Abolished	Very low, based on land and building types 22	Progressive rates (23%)	15% on profit (exempt if lived in >2 years) 21	No tax to pay when buying a property
Denmark	0.7% property transfer tax	0.51%-1.4% on assessed value	Up to 52.07% for non-residents	Up to 42%	Tax on income from Danish sources only
Estonia	Not specified	0.1%–2.5% of taxable value of land 24	Progressive rates (20%)	21% on capital gains from real estate	Low tax burden, with land tax
Finland	3% for land	0.2%–2% of assessed value	Progressive rates (57.3%)	Progressive rates	Non-EU/EEA citizens require permit
France	5.8% transfer duties (existing), 20% VAT (new) 26	Taxe foncière on all properties; taxe d'habitation on secondary homes	Progressive income tax rates	Not specified	Taxed on French-source income only
Germany	3.5%–6.5% transfer tax	0.26%–1% of assessed value	14%–45% plus 5.5% surcharge	Not specified	Non-residents must file German tax return for rental income 27
Gibraltar	Up to 7.5% stamp duty	Not specified	Not specified	Not specified	Preferential rates for first-time buyers 28
Greece	3% transfer tax + 3% municipal surcharge (3.09% effective) 30	2.7% of GDP	Progressive rates (44%)	15% (exempt until end of 2026)	Non-residents are taxed on Greek-source income 13
Hungary	4% of purchase price	Based on property size (up to 1,100 HUF per m²) 33	Progressive rates (15%)	Not specified	Foreign nationals required to hire a lawyer 32
Iceland	Not specified	0.18%–0.625%	22% capital income tax on gross income	22% capital income tax on sales proceeds 34	Net worth tax is not levied
Ireland	1%–6% on residential property	Local Property Tax (LPT) based on market value 35	25% on rental income (Irish company)	15% on bulk purchases of 10+ properties 35	Taxed on assets within the country
Italy	9% transfer tax mentioned as comparison	2.1% of GDP	Progressive rates (43%)	Not specified	Not specified
Kosovo	Transfer-related tax/fee on sale	Annual municipal property tax on assessed value 36	Not specified	Not specified	Notary and legal fees apply
Latvia	Not specified	0.2%–3% of cadastral value	10% on rental income	15% on capital gains	Low corporate income tax rates
Liechtenstein	Not specified	No recurrent taxes on property	Not taxable	Special tax on real estate gains	Foreign real estate exempt from tax
Lithuania	Not specified	High thresholds, sometimes seen as "luxury tax" 40	Progressive rates (up to 50%)	Not specified	Low tax revenue from immovable property 40
Luxembourg	7% (residential), 10% (commercial)	0.05% of private capital stock	0%–42% progressive tax rate	Half of progressive income tax rate	Tax credit available for primary residence 42
Malta	5% stamp duty	No annual property tax or council tax	Not specified	2%–12% depending on circumstances 44	Reduced 2% stamp duty for property in Gozo 44
Moldova	0.5% state duty	0.05%–0.3% of estimated value	12% flat rate for non-residents	50% of difference taxed as income	Non-residents taxed on Moldovan-source income 45
Monaco	6.25% notary fees (buyer)	No property tax	Not specified	No capital gains tax	Buyer pays notary and agent fees
Montenegro	3%-6% progressive transfer tax	0.25%–1% of market value	Not specified	Not specified	21% VAT on new builds
Netherlands	49.5% progressive tax rate	Imputed rent as part of income tax	Not specified	Not specified	Not specified
North Macedonia	Not specified	Not specified	Not specified	Not specified	No data available.
Norway	2.5% stamp duty on fair market value	Not specified	Not specified	Not specified	No other transfer taxes
Poland	Above 1% of GDP	Area-based valuation, not value-based	Progressive rates (32%)	Not specified	Tax revenues among the highest in CEE
Portugal	0.3%–0.45% (urban), 0.8% (rural)	0.8% for rural properties	Progressive rates (tax residents), 28% (non-residents) 51	50% of gain taxed (residents), 28% on full gain (non-residents)	51
Romania	1%-3% on capital gain	0.08%-0.2% on taxable value	10% flat tax on gross income	1%-3% on capital gain from sale	Tax is withheld by notary public
Serbia	2.5% transfer tax (if no VAT)	0.4% of cadastral value	20% flat tax on rental income (non-residents) 54	15% (exempt if held >10 years)	No specific tax breaks for foreigners
Slovakia	No property transfer tax	Three types: land, building, apartment tax 55	19-25% on rental income	19% (exempt if held >5 years)	No property transfer tax, one of the lowest in Europe 13
Slovenia	2% real estate transfer tax	Not specified	Not specified	25% (decreases with holding period)	No specific tax breaks for foreigners
Spain	6-10% (transfer tax), 10% (VAT on new)	0.4%-1.3% (IBI)	19% (EU), 24% (non-EU)	19-24%	Non-EU citizens cannot deduct expenses
Sweden	Not specified	0.75% of assessment value	Not specified	Not specified	Newly built owner-occupied homes are exempt for 15 years 61
Switzerland	Varies by canton (1-3.3%)	Varies by canton/commune (0.5-0.8% of market value) 63	Imputed rental income is taxed	Progressive tax on gains	Taxes paid to federal, canton, and commune bodies 63
Ukraine	2% state duty	0.1%–0.2% of minimum salary	18% + 1.5% military tax	18% on gains (exempt if owned >3 years) 64	Non-residents taxed on Ukrainian-source income 64
United Kingdom	0%–19% Stamp Duty Land Tax	Varies by municipality (council tax)	Not specified	Not specified	High revenue from immovable property taxation 13

Methodology and Scope

This report is a comprehensive analysis of the real estate tax and cost environment in 44 European countries. Its purpose is to provide a clear, detailed, and comparative overview for investors, researchers, and financial professionals considering real estate transactions in the region. The information is synthesized from a variety of expert sources, including financial advisories, legal firms, and governmental publications, to offer a multi-faceted perspective on the subject. It is important to note that tax laws are subject to frequent change and specific circumstances can significantly alter tax liability; therefore, this report should not be used as a substitute for professional legal or financial advice.

To ensure clarity and precision, the following key tax concepts are defined:

• Transfer Tax (Grunderwerbsteuer in Germany, ITP in Spain): This is a one-time tax levied on the buyer when a property is acquired. It is also referred to as a property purchase tax, registration duty, or stamp duty in various jurisdictions.
• Annual Property Tax (Grundsteuer in Germany, Taxe Foncière in France, IBI in Spain): This is a recurrent tax paid annually by the property owner to a national, regional, or local governing authority.67 The rate and tax base can vary considerably, affecting the long-term cost of ownership.
• Cadastral Value vs. Market Value: A crucial distinction, as the tax base for annual or transfer taxes may not be the property's actual market value. A property's cadastral value is a state-assessed value, often for tax purposes, and can be significantly lower than its open market value.
• Capital Gains Tax: A tax on the profit realized from the sale of a property, calculated as the difference between the sale price and the initial purchase price, often with allowances for improvement costs or other expenses.2

Core Tax and Cost Categories Explained: A Thematic Analysis

Acquisition & Transaction Taxes: A Tale of Two Europes

The taxation of real estate acquisition serves as a strategic lever for governments, with a clear distinction between countries that impose high upfront costs and those that have minimized or eliminated them.

In Western and Northern Europe, high transaction taxes are a primary source of government revenue. France, for instance, levies a transfer duty of approximately 5.8% on the sale of older properties.26 Similarly, Belgium's registration duties stand at a basic rate of 12.5% for existing homes, although regional variations and exemptions exist.10 In Spain, transfer tax rates can range from 6% to 10%.57 These taxes, combined with other fees, often push total transaction costs to between 10% and 15% of the purchase price.68 This approach generates a reliable and visible revenue stream, which, as evidenced by countries like the UK, France, and Belgium, accounts for a significant share of their GDP.13 This policy choice reflects a focus on funding local government services and public infrastructure through capital-intensive levies.70

In stark contrast, several Central and Eastern European nations have strategically lowered or abolished these taxes to attract foreign capital and stimulate market activity. Albania offers a clear example, with a low property purchase tax of 2% to 4%.1 The Czech Republic and Slovakia have gone further, with the former having abolished its 4% real estate purchase tax in 2020 and the latter having no property transfer tax at all.21 The underlying rationale for this policy is the recognition that low taxes can lower the barrier to entry for international investors, encouraging a greater volume of transactions and potentially leading to broader economic growth.

Annual Ownership Taxes: The Burden of Recurrence

The annual tax on property ownership represents a long-term financial commitment for investors. The burden of this tax is determined not only by the rate but also by the tax base.

In Germany, the annual property tax (Grundsteuer) is generally low, ranging from 0.26% to 1% of the assessed property value.27 However, this assessed value (

Einheitswert) is often considerably lower than the actual market value of the property, effectively reducing the tax burden.27 This system, combined with high upfront costs, tends to favor long-term, buy-and-hold investment strategies.

Other countries, particularly in Northwestern Europe, generate a larger percentage of GDP from recurrent property taxes.13 For example, the United Kingdom and France both collect a share of around 3.7% of GDP from these taxes, while Belgium's share is 3.2%.13 In contrast, countries in Eastern Europe and the Baltics collect a much lower percentage of GDP from immovable property taxes, with the Czech Republic, Estonia, and Lithuania collecting less than 0.5%.

A few jurisdictions stand out for having no annual property tax whatsoever. Liechtenstein and Malta have explicitly abolished recurrent property taxes, making them exceptionally attractive for individuals seeking to minimize long-term holding costs.38 This policy model is a significant departure from the European norm and is designed to attract and retain high-net-worth individuals and capital.

Rental Income & Capital Gains Taxes: Exiting the Market

The tax implications of generating rental income or selling a property are critical for determining an investment's profitability. A key factor is the difference between progressive and flat tax rates and the presence of exemptions.

Rental income is taxed at progressive rates in many countries. In Germany, for example, rental income is subject to a progressive personal income tax rate of 14% to 45%, plus a solidarity surcharge.27 In Spain, income tax rates for residents can range from 19% to 47%, and non-residents are subject to a flat rate of 19% (for EU citizens) or 24% (for non-EU citizens).57 A significant disadvantage for non-EU citizens in Spain is that they cannot deduct eligible expenses, unlike their EU counterparts.59 In contrast, some countries, like Albania and Moldova, offer simple, flat-rate taxation on rental income—15% and 12% respectively—making the tax burden predictable and transparent.

Capital gains taxation, or the tax on the profit from a sale, is often tied to the holding period. This policy is designed to discourage short-term speculation. For instance, in Bulgaria, no capital gains tax is due if a property has been owned for more than three years.16 Similarly, in Slovakia, the gain is exempt from taxation if the property has been held for more than five years 55, and in Serbia, the holding period for exemption is over 10 years.54 Conversely, in countries like Luxembourg, gains on real estate are taxed at half the progressive income tax rate after a five-year holding period, with a minimum tax rate of 15%.41

The tax burden for non-residents can be particularly complex. In Portugal, non-residents are taxed at a flat 28% on the entire capital gain, while residents are taxed on only 50% of the gain at progressive income tax rates.51 This demonstrates a clear policy to prioritize resident investors over non-resident ones.

Ancillary Fees & Charges: The Hidden Costs

Beyond direct taxes, a range of administrative and professional fees can add up to a significant portion of the total transaction cost. These "hidden" costs are a key factor in budgeting for a real estate purchase.

Notary and legal fees are often mandatory and can be substantial. In France, fees are typically between 7% and 8% for old properties and 2% to 3% for new ones.26 This term is often misleading as only a small portion is the notary’s actual remuneration, with the majority being taxes and duties remitted to the state.71 In Germany, notary and land registration fees can amount to 1.5% to 2% of the property value.

Mortgage-related fees also contribute to the total cost. In the United Kingdom, common fees include arrangement fees of around 1,000 GBP, booking fees of 100 to 250 GBP, and a potential higher lending charge of 1.5% of the mortgage amount for high loan-to-value products.73 For non-residents, the required down payment is often higher. In Spain, non-residents must provide a minimum deposit of 30%, compared to 20% for residents.74 In Germany, financial experts advise having 20% to 40% of the property’s value as equity capital.

Real estate agent fees are also a variable cost. In Germany, these fees are legally split between the buyer and the seller, ranging from 3% to 7%.72 In contrast, in Serbia and Montenegro, the agent's commission is typically included in the price and paid by the seller.

Country-by-Country Analysis

Albania

• Acquisition & Transaction Costs: The Albanian real estate market is noted for its low transaction costs. There is no Value Added Tax (VAT) or stamp duty on residential purchases, and the transfer tax ranges from 2% to 4% of the purchase price.1 This makes entry into the market affordable and allows investors to allocate more capital to renovations and other value-enhancing activities.
• Annual Ownership Taxes: Annual property taxes are among the lowest in Europe, calculated on surface area and location, and often amount to as little as 100 to 300 EUR annually for a luxury villa.2 The tax rate is a flat 0.05% to 0.1% of the assessed value.1
• Income & Capital Gains Taxes: A clear and profitable system applies. Rental income is subject to a 15% flat tax on net income, with eligible expenses being deductible.2 A capital gains tax of 15% is applied on the profit from a property sale, but this is exempt if the property has been held for more than five years.
• Mortgages & Financing: Mortgages are available for foreigners, but they may be subject to higher down payments or local guarantees. Loan-to-value ratios are typically between 60% and 70%, with interest rates around 7% to 9%.
• Key Points: The Albanian system is explicitly designed to be investor-friendly, offering a simple and transparent framework with low entry and exit costs.2 There are no legal restrictions on foreigners buying property, and ownership is granted with the same rights as local buyers.

Andorra

• No data available in the provided sources.

Austria

• Acquisition & Transaction Costs: The acquisition of real estate triggers a real estate transfer tax of 3.5% of the assessment basis, which typically corresponds to the purchase price.4 In addition, a registration fee of 1.1% of the purchase price is charged for registering the legal title in the land register.
• Annual Ownership Taxes: Real estate is subject to an annual property tax. The assessment basis is determined by the local tax office based on factors like location, size, and use.
• Income & Capital Gains Taxes: Personal income tax rates can go up to 55%.6 The provided material does not offer specific details on capital gains tax for real estate.
• Key Points: Austria is one of the countries in Europe with a relatively high percentage of its private capital stock subject to property taxes, at 0.10%.43 The property tax can be passed on to tenants as part of operating costs.

Belarus

• Acquisition & Transaction Costs: No real estate transfer tax is mentioned. The transfer of real estate is subject to state registration, which confirms the transfer and termination of rights.8
• Annual Ownership Taxes: The annual real estate tax for individuals is relatively low, ranging from 0.1% to 0.2%.9
• Income & Capital Gains Taxes: Capital gains from the sale of shares in Belarusian companies are taxed at 9%.9 Income tax for individuals is a flat 13%.9 Non-resident sellers are subject to income tax on the positive difference between the sale and purchase prices.
• Key Points: Foreigners face restrictions on acquiring property in Belarus, with long-term leases of up to 99 years being an available alternative.9 The geopolitical situation presents a significant non-financial risk that must be considered alongside the low tax rates.

Belgium

• Acquisition & Transaction Costs: When purchasing an existing home, a basic rate of 12.5% is applied for registration duties.10 For new-build homes, this is replaced by a VAT rate of 21%.10 In Wallonia, a reduced rate of 3% is available for a primary family home, with the rate increasing to 12.5% for additional properties.
• Annual Ownership Taxes: Property tax is a regional tax paid annually and is calculated based on the cadastral income of the property.
• Income & Capital Gains Taxes: Personal income tax rates can be as high as 50%.
• Key Points: Belgium is one of the countries that collects a high percentage of GDP from property taxes, with a share of 3.2%.13 Notary fees are government-regulated and are an essential part of the transaction.

Bosnia and Herzegovina

• Acquisition & Transaction Costs: In the Federation of Bosnia and Herzegovina (FBiH), a real estate transfer tax of 5% of the estimated value is applicable.14 In the Republika Srpska (RS), no real estate transfer tax is applied.14 The first transfer of a new building is subject to a 17% VAT.14
• Annual Ownership Taxes: In the RS, the annual tax rate is a maximum of 0.20% on the market value of the property.14 In the FBiH, property tax applies to rented or vacation real estate.
• Income & Capital Gains Taxes: Corporate profits from the sale of real estate are subject to a corporate income tax of 19% to 25%.
• Key Points: The tax regime is split between the FBiH and the RS, creating different environments for investors within the same country. The identity of real estate owners is not confidential as land registries are public.15

Bulgaria

• Acquisition & Transaction Costs: The property transfer tax ranges from 0.1% to 3% of the purchase price, depending on the municipality.16 Notary fees can range from 0.1% to 1.5%.
• Annual Ownership Taxes: An annual property tax is mandatory for all owners, ranging from 0.1% to 0.45% of the cadastral value.16 The household waste fee is also a mandatory annual expense.
• Income & Capital Gains Taxes: Rental income is subject to a flat 10% tax.16 Capital gains from a property sale are taxed at 10% on the profit, but this tax is waived if the property has been owned for more than three years.
• Key Points: The tax system offers predictability with a flat tax on rental income and a clear exemption for capital gains after a short holding period, which encourages long-term ownership.

Croatia

• Acquisition & Transaction Costs: The buyer is obligated to pay a real estate transfer tax of 3% of the property's market value, provided that the transaction is not subject to VAT.18 The sale of new buildings (less than two years old) and the land they are on is subject to a 25% VAT rate.
• Annual Ownership Taxes: Local governments may levy a tax ranging from 0.60 EUR to 8.00 EUR per square meter of usable area.
• Key Points: Tax exemptions for certain properties, such as those used as a permanent residence, are available regardless of the purchaser's nationality.19 Land registries are publicly available, so the identity of owners is not confidential.

Cyprus

• Acquisition & Transaction Costs: The tax on property transfer is progressive: 3% for values up to 85,000 EUR, 5% for the portion between 85,001 EUR and 170,000 EUR, and 8% for any amount over 170,000 EUR.20 For newly built properties where VAT has been paid, these fees are not applicable.20 Stamp duty is also paid by the buyer, with rates ranging from 0.15% to 0.20%.
• Annual Ownership Taxes: The provided information indicates that annual immovable property taxes have been abolished.20
• Key Points: The progressive nature of the transfer fees means that the total percentage of the tax increases with the value of the property.20 A 50% reduction in transfer fees may be applicable for resale properties where VAT is not paid.

Czech Republic

• Acquisition & Transaction Costs: The most significant feature of the Czech Republic's real estate tax system is the abolition of the 4% property purchase tax in 2020, meaning there is no tax to pay when buying a property.
• Annual Ownership Taxes: Property tax is a very low annual cost, calculated as the sum of a land tax and a tax on buildings and units.22 It is based on a complex formula involving tax bases, tax rates, and a coefficient determined by the municipality's population.
• Income & Capital Gains Taxes: Capital gains from a property sale are taxed at 15% on the profit, but this is exempt if the owner has lived in the property for at least two years or if the proceeds are used to purchase or reconstruct another property.
• Key Points: The country's policy of eliminating acquisition tax is a clear strategy to promote market activity and investment. Its property tax revenue as a percentage of GDP is among the lowest in the EU, at 0.3%.13

Denmark

• Acquisition & Transaction Costs: A property transfer tax of 0.70% is paid by the buyer.23 Notary fees are also a key part of the transaction costs, ranging from 0.73% to 1.23%.
• Annual Ownership Taxes: A national property tax is charged on owner-occupied homes but not on rental properties.23 The rate is progressive, with a 0.51% tax on assessed value up to DKK 9.2 million and 1.4% on the portion above that amount.
• Income & Capital Gains Taxes: Non-residents are taxed on income from Danish sources at rates that can reach up to 52.07%.23 Net capital income is taxed at a rate of up to 42%.
• Key Points: The taxation system is designed to generate significant revenue, with a high share of property taxes in total taxation (5.1%) and a high personal income tax rate (55.9%).

Estonia

• Acquisition & Transaction Costs: The provided sources do not specify a transfer tax rate, but the overall tax burden is noted as low.
• Annual Ownership Taxes: Estonia levies a land tax, which ranges from 0.1% to 2.5% of the taxable value of the land.24 However, the country's tax revenues from property are among the lowest in Europe, at 0.3% of GDP, partly because land values are often outdated.13
• Income & Capital Gains Taxes: Capital gains from the sale of Estonian real estate are subject to a 21% tax for non-residents.24 The personal income tax rate is a flat 20%.
• Key Points: The country's reliance on a land tax is considered an effective policy as it encourages development and discourages land hoarding, although low tax rates and outdated values limit the revenue generated.40

Finland

• Acquisition & Transaction Costs: The purchase of land in Finland incurs a 3% transfer tax on the total purchase price.25 The registration fee with the National Land Survey is approximately 144 EUR.
• Annual Ownership Taxes: Annual property taxes vary by municipality and typically range from 0.2% to 2% of the assessed property value.
• Income & Capital Gains Taxes: The personal income tax rate is high, with a maximum of 57.3%.6
• Key Points: Non-EU and non-EEA citizens are required to obtain a permit from the Finnish Ministry of Defence for each real estate transaction, which can take up to three months to process and costs 170 EUR per application.25 This permit is not required for apartments, which are typically owned as shares in a housing company.

France

• Acquisition & Transaction Costs: Transfer duties on existing properties amount to approximately 5.8% of the sale price.26 For new properties, a 20% VAT may apply instead.26 Notary fees, which are regulated by the state, add an additional 7% to 8% for old properties.26 The term "notary fees" is often misleading, as the majority of the cost is composed of taxes remitted to the state.
• Annual Ownership Taxes: Two main annual taxes apply. Taxe foncière (property tax) is paid by all homeowners, including non-residents, and is based on the cadastral rental value.26
  Taxe d'habitation (council tax) has been abolished for primary residences but still applies to secondary homes.
• Income & Capital Gains Taxes: Non-residents are taxed on their French-source income, including rental income, at progressive rates.26 The maximum personal income tax rate is 55.4%.
• Key Points: France relies heavily on property taxes, with a 3.7% share of GDP, one of the highest in the EU.13 The high upfront costs and a system of multiple taxes make it a high-cost environment for real estate investment.

Germany

• Acquisition & Transaction Costs: A one-time real estate transfer tax (Grunderwerbsteuer) is the highest additional fee, ranging from 3.5% to 6.5% of the purchase price, depending on the federal state.72 This creates internal tax competition between states, with a purchase in Munich having a 3.5% rate while Berlin's is 6%.72 Notary and land registry fees add 1.5% to 2%.
• Annual Ownership Taxes: The annual property tax (Grundsteuer) is generally low, ranging from 0.26% to 1% of the assessed value.27 The tax is based on an
  Einheitswert (uniform tax value), which is often lower than the market value.
• Income & Capital Gains Taxes: Rental income is taxed at progressive rates from 14% to 45%, plus a 5.5% solidarity surcharge.27 Non-residents are fully taxable on German-source rental income and must file a German tax return.
• Mortgages & Financing: Lenders typically require a down payment of 20% to 40% of the property’s value to cover additional costs and serve as a down payment.
• Key Points: The German system is characterized by high upfront costs but a low annual tax burden. This structure discourages short-term "flipping" and is more favorable for long-term, passive ownership strategies.72

Gibraltar

• Acquisition & Transaction Costs: Stamp duty is payable on the transfer of real estate. For non-qualifying purchasers, the rate is 0% for properties up to 200,000 GBP, and then on a tiered scale up to 3.5% on the portion above 350,000 GBP.29 A "Qualifying Purchaser" (first or second-time buyer) enjoys preferential rates, with no stamp duty on the first 300,000 GBP.
• Key Points: The tax system is designed to provide incentives for individual buyers, particularly first-time and second-time purchasers, to promote homeownership.29 Stamp duty on a mortgage is also charged at 0.13% to 0.20%.

Greece

• Acquisition & Transaction Costs: The buyer is subject to a real estate transfer tax of 3% on the property's taxable value, with a municipal surcharge that brings the effective rate to approximately 3.09%.30 This transfer tax is not payable if VAT is charged on the sale of a new building.
• Annual Ownership Taxes: Greece's property tax accounts for a high share of GDP, at 2.7%.13 It also taxes the imputed rent of the main residence as part of income tax.
• Income & Capital Gains Taxes: The maximum personal income tax rate is 44%.6 Capital gains realized by individuals on real estate sales are currently exempt until the end of 2026, though the general rate is 15%.
• Key Points: The exemption on capital gains until 2026 is a significant incentive for investors, effectively waiving exit taxes for a set period.

Hungary

• Acquisition & Transaction Costs: The main cost when buying property is the transfer tax, which is generally 4% of the property's market value.33 For non-EU citizens, a property acquisition permit is required, which costs 50,000 HUF.33
• Annual Ownership Taxes: A local building tax may be levied by municipalities, based on the property's size, but most residential properties are exempt.
• Income & Capital Gains Taxes: The personal income tax rate is a flat 15%.
• Key Points: Hungarian law mandates the use of a lawyer or notary for property transfers, with legal fees typically ranging from 0.5% to 1.5% of the property value.

Iceland

• Acquisition & Transaction Costs: The provided sources do not specify transfer tax rates.
• Annual Ownership Taxes: Municipalities levy an annual real estate tax, which is a percentage of the property's assessment, ranging from 0.180% to 0.625%.
• Income & Capital Gains Taxes: Non-residents owning real estate are subject to a 22% capital income tax on rental income and sales proceeds.34 This tax is calculated on gross income without deductions.34 The taxation of sales proceeds can be postponed if the owner plans to purchase a replacement property in Iceland within two years.
• Key Points: Iceland has one of the highest property taxes as a share of private capital stock in Europe, at 1.18%.43

Ireland

• Acquisition & Transaction Costs: The purchase of residential real estate is subject to stamp duty at a progressive rate: 1% for values up to 1 million EUR, 2% for the portion between 1 million EUR and 1.5 million EUR, and 6% for the portion exceeding 1.5 million EUR.10 A higher rate of 15% applies to the purchase of 10 or more residential units at a time, a policy aimed at discouraging institutional bulk buying and promoting homeownership.35
• Annual Ownership Taxes: Owners of Irish residential property must pay a Local Property Tax (LPT), which is based on the property's market value.
• Income & Capital Gains Taxes: An Irish company is subject to a 25% tax on rental income.35
• Key Points: The taxation system is tailored to address specific policy goals, such as deterring bulk purchases by applying a high stamp duty rate.35 The supply of "new" properties is subject to 13.5% VAT.

Italy

• Acquisition & Transaction Costs: The provided information notes a 9% transfer tax as a comparison point, making it a relatively high-cost jurisdiction.
• Annual Ownership Taxes: Italy's share of property taxes in total taxation is 5.1%.
• Income & Capital Gains Taxes: The personal income tax rate can be as high as 43%.

Kosovo

• Acquisition & Transaction Costs: A transfer-related tax or fee is typically applied to the sale, sometimes assessed on market value.36 Notary fees and a cadastre/registration fee also apply.
• Annual Ownership Taxes: An annual municipal property tax is levied on the assessed value of the property.36 Municipalities in Kosovo have faced challenges with tax compliance, leading to revenue shortfalls.
• Key Points: The tax system relies on local fees and taxes, with a municipal transaction fee of around 150 EUR.36

Latvia

• Acquisition & Transaction Costs: No specific transfer tax is detailed.
• Annual Ownership Taxes: Property tax rates are set by local municipalities and can range from 0.2% to 3% of the property's cadastral value.37 For residential properties, the rate is progressive, increasing with the cadastral value.
• Income & Capital Gains Taxes: Rental income for non-residents is taxed at a flat rate of 10%.24 Capital gains are taxed at 15%.24
• Key Points: Latvia offers a favorable tax environment for investors, with low tax burdens.24 However, some municipalities have set very low tax rates to attract high-income earners, potentially limiting their own revenue.

Liechtenstein

• Acquisition & Transaction Costs: No recurrent property taxes are levied in Liechtenstein.38
• Annual Ownership Taxes: Liechtenstein is an outlier, as it does not levy any recurrent property taxes at all.
• Income & Capital Gains Taxes: Capital gains from the sale of real estate are taxed separately with a special tax (Grundstücksgewinnsteuer), calculated by subtracting the purchase price and value-adding expenses from the sale price.39 Foreign real estate and income from it are exempt from tax in Liechtenstein.
• Key Points: The tax system is designed to attract high-net-worth individuals and capital by forgoing annual property taxes in favor of other forms of taxation, creating an attractive environment for long-term, passive asset ownership.

Lithuania

• Annual Ownership Taxes: Property taxation is sometimes viewed as a "luxury tax," with minimum thresholds so high that few properties are taxed.40 Consequently, Lithuania collects very little property tax revenue.
• Key Points: The low property tax revenue in Lithuania is a result of design failures and data limitations, which has prevented the country from benefiting from rising property values.

Luxembourg

• Acquisition & Transaction Costs: The sale of a residential property is subject to an aggregate transfer tax of 7%, composed of a 6% registration duty and a 1% transcription tax.
• Annual Ownership Taxes: Luxembourg has the lowest property tax revenue as a share of its private capital stock at 0.05%.43 A new tax bill may lead to communal rates ranging from 9% to 11%.
• Income & Capital Gains Taxes: Rental income is subject to a progressive personal income tax, with a maximum effective marginal tax rate of 42%.41 Capital gains from the sale of real estate are taxed at half the progressive income tax rate after a five-year holding period, with a minimum tax rate of 15%.
• Key Points: The "Bëllegen Akt" tax credit of up to 30,000 EUR per person is available for individuals acquiring a property for personal housing, reducing the cost of registration fees.

Malta

• Acquisition & Transaction Costs: When buying a property, the buyer is required to pay stamp duty. The standard rate is 5% of the purchase price, but this is reduced to 3.5% on the first 150,000 EUR for a primary and sole residence.
• Annual Ownership Taxes: Malta is another country that stands out for having no annual property tax or council tax, making it an investor-friendly destination with low holding costs.
• Income & Capital Gains Taxes: When selling, the seller is subject to a property transfer tax or a final withholding tax, with a standard rate of 8% of the transferred value.44 A reduced rate of 2% applies if the residential property was used as a sole residence and sold within three years of acquisition.
• Key Points: Malta's lack of recurrent property tax is a key feature designed to attract investment. The stamp duty is typically paid in two stages: 20% when signing the Promise of Sale and the remaining 80% upon signing the final deed.

Moldova

• Acquisition & Transaction Costs: The state duty for a property transaction is 0.50% and is paid by the buyer.45 Notary fees are also a significant part of the transaction, ranging from 0.1% to 1.30%.
• Annual Ownership Taxes: Property tax is levied on the estimated value of properties, with tax rates ranging from 0.05% to 0.30%.45 The actual rates are set annually by local authorities.
• Income & Capital Gains Taxes: Non-residents are taxed at a flat rate of 12% on income from Moldovan sources, including rental income.45 There is no separate capital gains tax; instead, capital gains are calculated as 50% of the difference between the sale and purchase price and are included in the individual’s gross income.
• Key Points: The low transaction costs and a simple, flat tax on rental income make Moldova an attractive option for certain investors.

Monaco

• Acquisition & Transaction Costs: When buying a property, the buyer is responsible for paying notary fees, which are 6.25% of the final purchase price.
• Annual Ownership Taxes: Monaco does not levy any property tax.
• Income & Capital Gains Taxes: Monaco does not have a capital gains tax.
• Key Points: Monaco is a zero-tax jurisdiction for property owners, making it a hub for high-net-worth individuals.46 Agency fees are typically paid by both the buyer and the seller.

Montenegro

• Acquisition & Transaction Costs: Montenegro uses a progressive transfer tax system. The rate is 3% for properties up to 150,000 EUR, then increases to 5% for the portion between 150,000 EUR and 500,000 EUR, and to 6% for the portion above 500,000 EUR.47 When buying a new property directly from a developer, a 21% VAT is paid instead of the transfer tax.47
• Annual Ownership Taxes: Annual property tax ranges from 0.25% to 1% of the market value, depending on location and property type.
• Key Points: The progressive transfer tax system means that a higher-value property will incur a proportionally higher tax burden.47 Legal fees and notary fees are also significant, with total additional costs often totaling 4% to 5% of the purchase price.47

Netherlands

• Annual Ownership Taxes: The Netherlands taxes the imputed rent of the main residence as part of income tax.40
• Key Points: The personal income tax rate is high, at 49.5%.

North Macedonia

• No data available in the provided sources.

Norway

• Acquisition & Transaction Costs: The only transfer tax in Norway is a stamp duty of 2.5% on the fair market value of the property at the time of registration.49 The transfer of real estate is exempt from VAT.
• Key Points: The simplicity of the transfer tax system is a notable feature. No stamp duty applies when purchasing shares in a company that holds real estate, as there is no change in the ownership of the property itself.50

Poland

• Annual Ownership Taxes: Poland collects more property tax revenue than the average OECD country, with a share slightly above 1% of GDP.40 The tax is based on area-based indicators rather than value-based ones, which can lead to underestimation of property values.40
• Income & Capital Gains Taxes: The personal income tax rate can be as high as 32%.
• Key Points: The area-based tax valuation makes the property tax regressive, as the tax amount does not increase in line with the property's market value, particularly in urban areas.

Portugal

• Acquisition & Transaction Costs: A Property Purchase Tax (IMT) applies, with rates for urban properties ranging from 0.3% to 0.45% and a flat rate of 0.8% for rural properties.51 A stamp duty of 0.8% is also levied on the deed of sale.51
• Annual Ownership Taxes: An annual Immovable Property Tax (IMI) is charged, with rates set by each municipality.51 An additional tax (
  AIMI) applies to properties valued over 600,000 EUR, with rates from 0.7% to 1.5%.
• Income & Capital Gains Taxes: For non-residents, capital gains are taxed at a flat rate of 28% on the entire gain.51 In contrast, tax residents are only taxed on 50% of the gain at their progressive income tax rates.
• Key Points: The tax system is more complex for non-residents, with a higher flat rate on capital gains compared to the tax treatment for residents, who benefit from a reduced taxable base.

Romania

• Acquisition & Transaction Costs: The gain from the sale of immovable property is taxed at 3% for properties held for up to three years and at 1% for properties held for more than three years.52 This tax is withheld by the notary public.52
• Annual Ownership Taxes: The annual property tax on residential properties is a rate between 0.08% and 0.2% of the taxable value, which is determined by the local council.
• Income & Capital Gains Taxes: A flat tax rate of 10% applies to rental income.52 The capital gains tax on a sale is also relatively low.52
• Key Points: The taxation system for property is straightforward, with a low, flat tax on rental income and a minimal capital gains tax that decreases with a longer holding period.

Serbia

• Acquisition & Transaction Costs: The purchase of real estate is subject to a property transfer tax (PTT) of 2.5% of the market value if VAT is not applicable.53 For new construction, the first transfer is subject to a 20% VAT.53 Notary fees are regulated at 0.1% to 0.5%.
• Annual Ownership Taxes: The annual property tax rate is 0.4% of the cadastral value.
• Income & Capital Gains Taxes: Non-residents pay a flat 20% tax on rental income.54 A capital gains tax of 15% is applied on the sale, but this is exempt if the property has been owned for over 10 years.
• Key Points: The 10-year holding period for capital gains exemption is a strong incentive for long-term investment.54

Slovakia

• Acquisition & Transaction Costs: A key feature is the absence of a property transfer tax.55 The transfer of buildings within five years of construction is subject to a 23% VAT.
• Annual Ownership Taxes: Real estate tax is composed of three types: land tax, building tax, and apartment tax, with rates set by municipal authorities.
• Income & Capital Gains Taxes: Capital gains from the sale of real estate are subject to a 19% tax but are exempt if the property was held for more than five years or was the taxpayer's permanent residence for at least two years prior to the sale.
• Key Points: The low tax revenue from immovable property as a share of GDP and the absence of a transfer tax are a clear policy to encourage investment.

Slovenia

• Acquisition & Transaction Costs: The seller is responsible for paying a real estate transfer tax of 2% of the purchase price, unless the sale is subject to VAT (22% or 9.5%).56 The tax must be paid before the purchase agreement can be notarized and the property registered.
• Income & Capital Gains Taxes: An individual selling a property is subject to income tax on capital gains.56 The tax rate, initially 25%, decreases every five years of ownership and is waived after 15 years.56 An exemption applies if the seller had a permanent residence in the property for at least three years prior to the sale.
• Key Points: The tax system is unique in that the transfer tax is levied on the seller, who is also responsible for capital gains tax.56 There are no special tax breaks for foreigners.

Spain

• Acquisition & Transaction Costs: For resale properties, a transfer tax (ITP) applies, with rates varying by region and typically ranging from 6% to 10%.57 For new properties, a 10% VAT applies, plus stamp duty of 0.5% to 1.5%.57 The total costs, including taxes and fees, can add up to between 10% and 15% of the purchase price.
• Annual Ownership Taxes: All property owners, including non-residents, must pay an annual council tax known as IBI, which varies by municipality and can range from 0.4% to 1.3% of the property's cadastral value.57
• Income & Capital Gains Taxes: Non-residents are subject to Non-Resident Income Tax (IRNR) on rental income. The tax rate is 19% for EU citizens and 24% for non-EU citizens, with a key distinction that only EU citizens can deduct eligible expenses.
• Mortgages & Financing: Non-residents are typically limited to a maximum loan-to-value of 70%, meaning a minimum 30% down payment is required.
• Key Points: The tax system is highly fragmented and can vary significantly by autonomous region, necessitating a detailed, location-specific analysis.

Sweden

• Annual Ownership Taxes: Owners of a residential house are liable for a property charge, which is 0.75% of the property’s assessed value, up to a certain upper limit (SEK 9,525 in 2024).60 Newly built owner-occupied apartments are exempt from this charge for the first 15 years.61 Owners of undeveloped land pay a property tax of 1% of the assessment value.
• Key Points: The 15-year tax exemption for new builds is a clear long-term policy designed to incentivize new construction and increase the housing supply.

Switzerland

• Acquisition & Transaction Costs: Property transfer taxes vary widely by canton. For example, Bern has a rate of 1.8%, while Geneva has a standard rate of 3%.
• Annual Ownership Taxes: Property owners pay taxes to three levels of government: federal, cantonal, and communal.63 Cantonal and municipal taxes can vary significantly. In the Canton of Valais, the annual taxes are around 0.5% of the market value, while in Vaud, they are slightly higher at 0.8%.
• Income & Capital Gains Taxes: Owners must declare an imputed rental income from their property, which is taxed along with their other income.62 When a property is sold, a progressive property capital gains tax is levied on the profit.
• Key Points: The tax system is highly fragmented, and tax liability is entirely dependent on the specific canton and municipality.

Ukraine

• Acquisition & Transaction Costs: The buyer pays a 1% state duty to the Pension Fund, and the seller pays a 1% state tax.64 Total costs for the buyer, including notary and legal fees, can range from 3.1% to 4.1% of the purchase price.
• Annual Ownership Taxes: Residential property owners are liable for property tax if the size of their property exceeds certain thresholds (e.g., 60 square meters for an apartment).64 The tax can be around 0.1% to 0.2%.
• Income & Capital Gains Taxes: Non-residents are generally taxed at 18% on income from Ukraine, with an additional 1.5% military tax.64 A capital gains tax of 18% applies on the sale of real estate, but this is waived if it is the first sale of the year and the owner has held the property for over three years.
• Key Points: The low tax rates and transaction costs make Ukraine's real estate market financially appealing, but these must be weighed against significant non-financial risks.

United Kingdom

• Acquisition & Transaction Costs: Stamp Duty Land Tax (SDLT) is a progressive tax with rates that can reach up to 19% for non-UK residents purchasing an additional property valued at over 1.5 million GBP.65 The rates vary based on the value, buyer status (first-time buyer vs. second homeowner), and residency.
• Annual Ownership Taxes: Property owners are subject to an annual council tax, which varies by local authority and is based on the property's value band.66 The UK has one of the highest shares of property taxes in GDP, at 3.7%.
• Key Points: The UK's taxation system relies heavily on both upfront and recurrent property taxes, making it a high-revenue, high-cost environment for real estate investment. The government has used tiered stamp duty rates to address housing market dynamics and disincentivize certain types of purchases, such as those by second homeowners or corporate entities.

Analysis of Salient Points & Conclusions

The analysis of real estate tax regimes across Europe reveals that governments employ tax policy as a precision tool to achieve specific economic, social, and political objectives. This can be understood through a model of targeted policy design.

Firstly, a number of jurisdictions use acquisition incentives to stimulate market activity and attract foreign capital. By eliminating or significantly reducing transfer taxes, countries like the Czech Republic and Albania lower the financial barrier to entry, signaling an open and investor-friendly environment.2 This approach prioritizes market volume and capital inflows over immediate tax revenue from individual transactions.

Secondly, a different set of policies focuses on development incentives. These measures are designed to encourage new construction and increase housing supply. In countries like Montenegro and Croatia, the first sale of a new property is subject to a high VAT rate, which, while raising revenue, also channels investment into new-builds as opposed to the resale market.19 Sweden's 15-year tax exemption for newly built homes is another example of a long-term incentive to increase housing stock.

Thirdly, some countries have implemented affordability incentives to support individual homeownership. The high stamp duty rate on bulk purchases of ten or more properties in Ireland is an explicit policy to deter institutional investors and favor individual buyers.35 Similarly, Gibraltar offers preferential stamp duty rates for first-time and second-time buyers, making it more affordable for individuals to enter the market.

Finally, retention incentives are used to encourage long-term capital retention and discourage short-term speculation. The capital gains tax exemptions tied to a specific holding period are a clear example of this. In Bulgaria, this period is three years, while in Slovakia and Serbia, it is five and ten years, respectively.16 This policy influences an investor's exit strategy and rewards those who contribute to market stability over a longer time horizon.

Beyond the tax rates themselves, a critical examination of the ancillary costs and administrative burdens is essential. The term "notary fees," as seen in France, can be a misnomer, as the majority of the cost is not the notary's remuneration but taxes remitted to the state.71 This highlights the importance of understanding the true composition of transaction costs. Furthermore, in jurisdictions with fragmented tax systems like Germany, Spain, and Switzerland, the final tax liability is highly dependent on the specific state, canton, or municipality, adding a layer of complexity to the investment process.72 The low taxes in countries like Belarus and Ukraine, while financially attractive, are inseparable from the significant geopolitical and legal risks, which can include restrictions on foreign ownership and legal uncertainties.

A unique investment philosophy is found in the zero-tax regimes of Monaco, Malta, and Liechtenstein. These jurisdictions have made a deliberate choice to forgo recurrent property taxes to attract and retain high-net-worth individuals and capital.38 This creates a highly favorable environment for passive, long-term asset ownership, as the tax burden is shifted to transaction-based taxes or other forms of wealth and income taxation. This model represents a distinct counterpoint to the high-revenue systems seen in most of Europe.

In conclusion, the European real estate tax landscape is not uniform. It is a mosaic of different policy philosophies, with tax systems ranging from low-burden and growth-oriented to high-revenue and service-oriented. A successful investment strategy requires a deep understanding of not only the published tax rates but also the underlying policy goals, the nuances of ancillary costs, and the specific regional variations and non-financial risks that define each market.