Transfer tax varies by country
Property taxes begin as soon as a home is purchased. Among European countries, Belgium has one of the highest property transfer taxes, with rates that can reach 12.5%, depending on the region. It is followed by England, the Netherlands and Luxembourg, while in Portugal the maximum IMT rate is 8%.
Despite these high rates, some countries offer tax benefits for certain buyers or types of housing. On the other hand, Estonia and Czechia do not charge transfer tax, while Lithuania applies a reduced rate. Among the countries analysed, Portugal ranks among those where this tax has the greatest impact.
Annual property tax and rental income
Property taxes during ownership also vary considerably. In Portugal, IMI ranges between 0.3% and 0.8%, while Spain has one of the highest maximum rates in Europe. Belgium, Germany, the United Kingdom, France and Lithuania also impose significant property taxes. Cyprus and Malta, on the other hand, do not levy an annual property tax.
Rental income taxation also differs substantially. Denmark has the highest tax burden on lower rental income, followed by the Netherlands and Finland. For higher rental income, Belgium, Denmark, Germany and Greece apply some of the highest rates. In Portugal, rental income is currently taxed at 25%, with reductions available in certain cases.
Capital gains also increase the tax burden
When selling a property, property taxes include capital gains taxation. Denmark has one of the highest tax burdens, followed by Luxembourg and Germany, although Germany grants an exemption for properties held for more than ten years.
Among the most favourable systems are Malta, North Macedonia and Romania, where taxation is significantly lower. Portugal occupies a mid-range position among the countries analysed, with capital gains tax reaching up to 24%.
Portugal remains in the middle of the ranking
The comparison of tax burdens highlights significant differences across Europe. Belgium stands out as one of the countries where property taxes are highest, considering purchase, ownership and rental. Conversely, Cyprus and Malta offer a more favourable tax framework for property owners.
For anyone planning to buy, sell or invest in property, understanding each country's tax system is just as important as assessing the property's price, since taxes can significantly affect the overall cost of the investment.
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