High property taxes levied not only on land but also on buildings and structures can discourage investment in infrastructure, which businesses would have to pay additional tax on. For this reason, businesses may choose to locate away from places with high property taxes.
Two of the 29 European countries covered here, Liechtenstein and Malta, do not levy any recurrent taxes on property at all. Estonia is the sole country in this map to taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. only land, meaning that its real property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. is the most efficient.
Of the 27 countries that levy property taxes, 20 allow businesses to deduct property or land taxes from corporate income, which mitigates the tax burden and encourages businesses to invest.
Hungary has the lowest property tax revenue as a share of its private capital stock, at 0.008 percent. The Czech Republic has the second-lowest share, at 0.04 percent, followed by Turkey, at 0.01 percent. The highest property taxes as a share of the private capital stock occur in the United Kingdom (2.57 percent), Greece (1.16 percent), and France (1.13 percent).
On average, the revenue raised from recurrent property taxes in the 27 European countries covered that have a property tax lies at 0.41 percent of their private capital stocks. In contrast, the United States raises as much as 1.81 percent of its private capital stock in property taxes.
Recent Changes
Starting in 2025, Germany is devolving its property tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. to the state level. The state of Baden-Württemberg used this opportunity to apply property taxes only to the value of land.
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