Nomad Capitalist: Six Countries With No Property Tax In Europe

Real estate investors looking to avoid recurring property taxes can focus on a handful of European jurisdictions where such levies are either absent or minimal. Below is a concise overview of the tax environment for property ownership, transfers, rental income, and capital gains in each of these countries.

Croatia

• Property tax: None (holiday homes pay only a symbolic amount).
• Transfer tax: 3 % on every real‑estate sale, as set by the Real Estate Sales Tax Act.
• Capital‑gains tax: 20 % on gains realized from the sale of property.
• Rental income (non‑tourist): If annual rent is under €40,000, the effective tax rate ranges from 7 % to 8.2 %.
• Rental income (resident/EU nationals): Lump‑sum tax per rented bed, typically €20–€200 per year; the exact amount is determined by the local municipality.

Faroe Islands

• Property tax: No annual property or value tax.
• Rental income: Taxed locally. Income below roughly €15,000 (≈ 40,000 DKK) per year is exempt.
• Foreign rental income: Taxed in the country where the property is located, but must be disclosed on the taxpayer’s return and may generate a deduction.

Georgia

• Property tax: None, provided the taxpayer’s Georgian‑source income stays below 40,000 GEL (≈ US $15,000) per year.
• Transfer tax / stamp duty: No charges on property acquisition or transfer.

Liechtenstein

• Property tax: No annual levy; however, a notional income based on the net property value is subject to regular income tax.
• Capital‑gains tax: Real‑estate profits tax applied to gains after deducting acquisition and improvement costs.
  • Progressive rates: 0 % on gains up to CHF 15,000; up to 0.7 % on gains exceeding CHF 170,000.

Malta

• Property tax: None.
• VAT: No value‑added tax on purchase or sale of immovable property.
• Capital‑gains tax: Flat 12 % on the transfer value (selling price).
• Stamp duty (transfer tax): Paid by the buyer, calculated on the selling price.
  • COVID‑19 adjustments (for Maltese residents):
    • Initial 5 % stamp duty reduced to 1.5 % on the first 20 % of the purchase price payable at signing.
    • Seller withholding tax lowered from 8 % to 5 %.
  • First‑time buyers: exemption on the first €175,000; the remaining amount taxed at 5 %.

Monaco

• Property tax: None; the principality also has no wealth tax.
• Rental income tax: 1 % of the annual rent, plus additional local charges.
• Capital‑gains tax: 33.3 % on profit from the sale of real estate.
• Loss carry‑forward: Real‑estate losses can be offset against future gains for up to five years.

When evaluating a property purchase in any of these jurisdictions, consider not only the absence of annual property tax but also the impact of transfer taxes, capital‑gains rates, and rental‑income treatment. These factors together determine the overall tax efficiency of a real‑estate investment.