Updated
GL-P-04
01 / In 30 seconds
The short answer
- 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
02 / In plain words
What Property tax means
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.
A case from practice
A client calculated the budget from the property price and the associated transaction costs. The annual burden and the tax on a future sale were not included. With a full budget, the payback horizon looked different — and the client then made the decision with full awareness.
When it needs to be calculated
- Buying a property abroad
- Calculating the full cost of ownership
- A buy-to-let investment
- A property for a Golden Visa
- Planning the sale of a property
- Changing tax residence
03 / What it covers
Which taxes arise
On purchase
- Transfer tax
- Registration fees
- Notarial costs
During ownership
- Annual property tax
- Local charges
- Tax on rental income
On sale
- Capital gains tax
- Fees
- Legal costs
Second level
- Taxation in the country of residence
- Double tax treaty
- Declaring
04 / How it works
How to calculate the burden
Gather the rates for all three points
Confirm the rules for non-residents
Check your country of residence
Calculate the full cost of ownership
Deciding on the property
05 / Key facts
What you need to know
01
The owner pays the tax regardless of where they live
02
Taxes arise on purchase, during ownership and on sale
03
Terms may be stricter for non-residents
04
Rental income is taxed separately
05
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
06 / Expert advice
How to prepare in advance
Before the deal a full budget is drawn up: taxes and fees on purchase, the annual burden, tax on rental income and tax on sale. Whether there are differences for non-residents is checked separately. And the picture is checked against your country of tax residence — foreign real estate is often subject to declaring there too.
What we do for you. 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.
Dmitry NagyTax consultant, international taxation and compliance (ex-Big4)
07 / Questions
Frequently asked questions
The owner of the property, regardless of which country they live in and where they are tax resident.
Taxes and fees on purchase, tax on rental income if the property is let, and capital gains tax on sale.
In some countries, yes: higher rates or additional charges may apply, or reliefs for local residents may not be available.
Often, yes. The rules depend on your country of tax residence and are checked separately from local taxes.
Add up the costs at three points: the deal, annual ownership and the sale. Only then is the real payback horizon visible.
It allocates taxing rights between countries and may allow tax paid to be credited. The specifics depend on the treaty.
INITIAL ASSESSMENT
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We will design a solution for your case, choose the country and the right status, and take the whole process through to the result.
