Propertytax
Property tax
- What it is
- An annual tax on owning real estate in the country where the property is located
- Who pays
- The owner, regardless of where they live
- What else there is
- Taxes on purchase and sale, tax on rental income, local charges
- A point for foreigners
- In some countries rates for non-residents are higher or there are separate charges
- What matters
- Calculate the full cost of ownership, not just the purchase price
In plain words
Property tax is an annual payment by the owner for owning a property in the country where it is located. It is paid by the owner regardless of where they live and whether they are tax resident in that country. The basis of calculation is usually tied to the cadastral or market valuation of the property.
It is important to see the whole picture: taxes arise at three points. On purchase — registration fees and transfer tax. During ownership — the annual property tax and, if the property is let, tax on rental income. On sale — capital gains tax. Rates and rules differ everywhere.
There are particular points for a foreign buyer. In some countries rates for non-residents are higher, additional charges apply, or reliefs available to local residents are not available. Plus there is a second-level question: how this income and ownership will be treated in your country of tax residence. The full budget of ownership is calculated before the deal.
When it needs to be calculated
Which taxes arise
- Transfer tax
- Registration fees
- Notarial costs
- Annual property tax
- Local charges
- Tax on rental income
- Capital gains tax
- Fees
- Legal costs
- Taxation in the country of residence
- Double tax treaty
- Declaring
How to calculate the burden
- 01Gather the rates for all three points
- 02Confirm the rules for non-residents
- 03Check your country of residence
- 04Calculate the full cost of ownership
- 05Deciding on the property
What you need to know
- The owner pays the tax regardless of where they live
- Taxes arise on purchase, during ownership and on sale
- Terms may be stricter for non-residents
- Rental income is taxed separately
- Your country of residence may also take this income into account
Common mistakes
- Counting only the price of the property without taxes and fees
- Not taking into account the annual burden for years ahead
- Forgetting tax on sale
- Not checking the rules for non-residents
- Ignoring declaring in your country of residence
What this means for a BRIDGES client
We calculate not the price of the property but the full cost of ownership: the deal, annual taxes, letting, exit. And we check what happens in your country of tax residence — that is where unexpected obligations most often arise.
Frequently asked questions
01 /Who pays property tax?
The owner of the property, regardless of which country they live in and where they are tax resident.
02 /What other taxes arise?
Taxes and fees on purchase, tax on rental income if the property is let, and capital gains tax on sale.
03 /Are rates higher for foreigners?
In some countries, yes: higher rates or additional charges may apply, or reliefs for local residents may not be available.
04 /Do I need to declare the property at home?
Often, yes. The rules depend on your country of tax residence and are checked separately from local taxes.
05 /How is the full cost of ownership calculated?
Add up the costs at three points: the deal, annual ownership and the sale. Only then is the real payback horizon visible.
06 /Does a double tax treaty help?
It allocates taxing rights between countries and may allow tax paid to be credited. The specifics depend on the treaty.
See also
Read next
This material has undergone editorial review by BRIDGES.
Working out your purchase budget?
We will draw up a full budget of ownership — from the deal to the sale, with taxes in both countries.