Property taxes

The comparative costs of buying

As with most things we buy, a tax is generally payable on the purchase of a property. It is an easy tax for Government’s to collect and generally lucrative because of the high level and value of transactions. But each country’s tax regime is different with some countries being much more favourable. Here we compare how the tax treatment of property differs by country to provide and easy to read guide for buyers.

As well as the underlying purchase price, there are many other costs to factor in when buying a property. By far the largest of these is probably the purchase tax, such as Transfer Tax or Stamp Duty. Aside
from raising revenue, property taxes and levies are also used to influence consumer behaviour. For example, a government may increase stamp duty to control excessive speculation, stabilise price inflation and limit foreign investment. Such measures have become popular as house prices in many cities have risen sharply and becoming unaffordable for some.

Just as each country’s economy and housing market is different, so are the property taxes. Some are imposed on a national level, while others are local city or state regimes. Ireland, for instance, imposes a simple levy system of 1% below 1 million and 2% above 1 million - irrespective of the region, city or buyer nationality. In contrast, in the United States taxes are not imposed at a federal level, but usually at
a state and city level. For instance, in New York City, a buyer will face state purchase taxes of approximately 0.4% and city taxes of 1.4%. Residential property is a highly desirable asset regarded as a safe longterm investment, and increasingly renowned global cities, such as London and New York, have attracted investment from overseas buyers. In many instances, this has been blamed for rapidly rising prices. In response, in some countries overseas buyers face additional taxes and restrictions.

In Sydney, overseas buyers are restricted to purchasing new build properties – usually apartments – and accrue an additional 8% purchase duty. In addition, purchases of property over $3 million attract a Premium Property Duty. Since 2012, Hong Kong has a 15% additional levy on top of stamp duty. In England the tax regime is identical regardless of buyer nationality; any buyer with more than one property is liable for an additional 3% stamp duty. There is currently a government consultation investigating the impact of an 1% additional levy on property purchases by non-UK residents.

Stamp Duty rate for an international buyer

The details

The details of property taxes around the world