Looking at investing in a European overseas property this year?
The popularity of real estate as a long-term investment asset is long established but continues to be a topic of interest for individuals looking to relocate, seeking to buy a holiday home or simply looking for investment opportunities beyond their home country.
This popular investment has not escaped the notice of Government’s or tax authorities, with some having faced internal protests as real estate prices, especially in the most popular destinations, keep rising, pushing local residents out as foreigners buy houses and apartments to rent.
Each Government takes its own approach to tackling and taxing the issue of property ownership by foreign nationals: while a few apply directly legal restrictions, most opt for raising more tax revenue from foreign property owners in some form. Ownership transparency has also increased through property registers or specific registers of beneficial ownership where an ownership structure is used. This, combined with the introduction of the Common Reporting Standard (CRS), has greatly increased the level of transparency for individuals with real estate and bank accounts in many countries throughout the world. Under the CRS financial institutions release information each year to their domestic tax authorities in over 100 countries who share that information with tax authorities in the owner’s home country.
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Owning a foreign home or property investment can bring a host of complexities, so it is vital that prospective owners understand the tax and legal context for any country in which they intend to invest. This guide provides a summary of the tax rules for foreigners buying real estate in Europe.