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 increase as families both look for investment opportunities beyond their home country and seek to buy property in holiday locations.
The dramatic increase in working from home during the COVID-19 pandemic is also expected to lead to more foreign property ownership in the long term. The ease of travel and shared citizens’ rights across the EU borders mean that foreign property ownership has accelerated and it has not escaped the notice of Government’s or tax authorities.
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 is also increasing 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 families 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.
Take a look at our interactive map demonstrating the current status of global tax transparency.
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For families, these developments only add to the complexity of owning a foreign home or property investment 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 legal and tax rules for foreigners buying real estate in Europe, including in France, Germany, Netherlands and the UK.