Property buyers across Europe are grappling with wildly different tax bills depending on where they purchase, with some facing tens of thousands of euros in charges while others pay nothing at all.
An analysis by the Financial Times shows that transaction levies, known as property transfer taxes, can add €30,000 (about A$49,000) or more to the cost of a €300,000 (A$490,000) home in parts of Spain and Belgium, while in Zurich, buyers pay no transfer tax at all under a 2005 cantonal law designed to boost property sales.
This so-called “tax roulette” underscores how government policy shapes one of life’s biggest financial decisions.
In Spain, the country’s 17 regions set their own rates.
Catalonia and Valencia impose flat levies of 10 per cent — meaning €30,000 (A$49,000) on a €300,000 (A$490,000) property, among the highest in Europe.
Alícia Romero, Catalonia’s top economic official, said the tax has not slowed the region’s market, anchored by Barcelona, but added, “The more you have or the more you earn, the more you pay.”
The Catalan government has extended a reduced 5 per cent rate to buyers up to age 35 and women who have experienced gender violence, while raising marginal rates for luxury purchases above €600,000 (A$980,000).
Belgium also ranks among the most expensive. Its standard “registration fee” is 12 per cent, that’s €36,000 (A$59,000) on a €300,000 (A$490,000) home, although Flanders cut the rate to 2 per cent for sole residences in 2022 and Brussels now exempts the first €200,000 (A$326,000) of a property’s value for eligible buyers.
The UK sits at the other extreme with a progressive “stamp duty” system.
First-time buyers pay nothing on homes up to £300,000 (about A$580,000), but anyone buying an additional property pays a 5 per cent surcharge on top of standard rates, taking the top marginal charge to 17 per cent above £1.5 million (about A$2.9 million).
The policy recently made headlines when Deputy Prime Minister Angela Rayner resigned after admitting she failed to pay the surcharge on a second property.
Critics say the tax discourages people from moving.
Richard Donnell, executive director at Zoopla, said: “Is it about raising cash or is it about helping a functioning housing market? I think in the UK our taxes around property are just about raising money and a bit clunky.”
Elsewhere, France keeps transfer taxes moderate but recently allowed local departments to add 0.5 percentage points to shore up public finances.
French buyers face another hit: hefty real estate agent fees that can reach 8 per cent, compared with around 3 per cent in Germany and Italy and almost none in Spain or the UK.
With housing affordability under pressure across Europe, some governments are targeting relief for young or first-time buyers.
