The OECD is preparing a global real‑estate transparency framework that will require owners of foreign property to disclose their holdings to tax authorities, mirroring the existing Common Reporting Standard (CRS) for bank accounts and the forthcoming CARF regime for crypto assets.
How the framework will work
- Two‑stage reporting – a one‑time declaration of all existing property holdings, followed by annual updates for any new acquisitions, disposals, capital‑gain events and rental income.
- Core data fields – at minimum the owner’s name, tax‑identification number or address, the property’s address and its market value. Optional fields include financing method (mortgage, cash), taxes paid, and the full ownership structure.
- Beneficial‑owner disclosure – entities that own property (companies, trusts, foundations) must identify the ultimate beneficial owner (UBO) in line with Financial Action Task Force (FATF) standards.
Expected rollout
The framework is likely to be introduced first in jurisdictions that already participate in CRS, such as:
- United Kingdom
- Canada
- Australia
- New Zealand
and then expanded to the European Union and other major developed economies. The United States has signaled that it will not join the scheme, creating a potential reporting gap for properties held in the U.S. through entities such as U.S. LLCs.
Implications for high‑net‑worth individuals
- Loss of anonymity – Holding property through offshore companies, trusts or foundations will no longer shield ownership, as the UBO must be reported.
- Visibility of rental activity – Rental income and occupancy status will be part of the data shared between jurisdictions.
- Potential enforcement – Tax authorities will have access to property‑value information, purchase price, financing details and tax payments, enabling cross‑border enforcement actions.
Jurisdictions that may remain outside the regime
Countries that have not signed onto the OECD’s mutual administrative assistance agreements, or that only respond to specific requests, could continue to offer greater privacy for property owners. Examples include:
- Serbia – has a request‑based assistance model and is not automatically part of CRS.
- Paraguay, Philippines, Dominican Republic, Cambodia, Botswana (which is developing a citizenship‑by‑investment program), Uzbekistan, Tanzania, North Macedonia, Guatemala.
- Caribbean states such as El Salvador, where citizenship can be obtained and property purchased under that nationality.
Practical considerations
- Legal compliance – Residents of high‑tax jurisdictions must still report foreign property in accordance with local law; non‑compliance can constitute a criminal offense.
- Citizenship‑by‑investment routes – Acquiring a second passport in a non‑participating country may allow property purchases that remain outside the reporting network, but the structure must be transparent to the owner’s home‑country tax authority.
- US property exposure – Even without US participation, other countries may require reporting of US‑based assets, similar to the CRS requirement for crypto holdings.
The forthcoming real‑estate transparency framework will close a long‑standing privacy gap, giving tax authorities near‑total visibility over global property assets. Investors seeking to preserve confidentiality may need to consider jurisdictions that are not party to the OECD agreement, while ensuring full compliance with the tax laws of their primary residence.
