International Real Estate Taxes (2025): Buyer’s Guide
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9/23/2025
International Real Estate Taxes (2025): Buyer’s Guide
When you buy property abroad you face taxes at four moments: purchase, holding, income from rent, and exit. This guide explains each tax in simple terms, shows typical ranges, and gives a quick way to estimate your bill before you commit.
Tax types across the deal — quick table
| Stage | Tax / fee | Typical range | Who pays | Notes |
|---|---|---|---|---|
| Purchase | Stamp duty / transfer tax or VAT on new build | 3–10% (VAT may be higher on new builds) | Buyer | Varies by price brackets and property type |
| Purchase | Notary & registry fees | 0.2–1.0% | Buyer | Deed execution and land entry |
| Holding | Annual property tax | 0.1–1.0% of assessed value | Owner | Assessment differs by municipality |
| Income | Rental income tax / withholding | 10–30% on net or gross | Owner | Rates and deductions depend on residency and structure |
| Exit | Capital gains tax | 5–28% on gain | Seller | Holding period and exemptions reduce the bill |
| Wealth / other | Wealth/solidarity taxes, local surcharges | Jurisdiction-specific | Owner | Applies only in some countries/regions |
What changes your tax bill
| Factor | Effect | What to do |
|---|---|---|
| Property type | New builds may carry VAT; resales usually pay transfer tax | Confirm which regime applies before paying deposit |
| Use (home vs rental) | Rental income can trigger withholding and reporting | Track deductible costs; check short-term rental rules |
| Ownership form | Personal vs company (SPV) changes rates and filings | Model both options; include admin/banking costs |
| Holding period | Longer holding may reduce capital gains tax | Check step-down rules and exemptions |
| Tax residency | Determines where income is taxed and if credits apply | Use treaty relief (DTT) to avoid double taxation |
| Financing | Interest deductibility differs by country | Keep bank proofs; check local limits on deductions |
Simple way to estimate before you buy
Rule of thumb: Purchase taxes and fees often add 4–12% on top of price. Annual tax can be 0.1–1.0% of assessed value. If renting, plan for 10–30% tax on net or gross income depending on the regime. Capital gains on exit can be 5–28% of the gain, reduced by allowances and holding period.
Worked example (illustrative only)
Price: 300,000. Purchase taxes/fees at 8% ≈ 24,000. Annual tax at 0.5% on 300,000 ≈ 1,500. Rent 18,000/year; net after expenses 14,000; income tax at 20% ≈ 2,800. Sell later at 360,000 → gain 60,000; CGT at 15% ≈ 9,000 (before exemptions). Always confirm local bands.
Documents the tax side will ask for
Sale contract/deed; invoices and payment proofs; bank MT103 copies; valuation or assessment notices; rental agreements and receipts; expense invoices (insurance, HOA, repairs); loan statements; residency/tax ID; forms for treaty relief (if applicable).
Personal vs company ownership (high-level)
Personal: simpler setup, fewer filings; income and gains taxed in your hands. Company (SPV): can help with co-ownership or certain restrictions; brings admin costs, corporate filings, and stricter banking/KYC. Model both with total cost (tax + admin + banking).
Cross-border reporting and double taxation
Many countries have double tax treaties (DTT). Typically, rental income is taxed where the property sits; your home country may also tax it but gives a credit. Keep proofs and file on time in both places to use credits properly. In complex profiles (multiple incomes, relocations), read more about tax and structuring support.
Two expert notes
“Track every euro or dollar you spend on the property — clean records often reduce the tax base on income and exit.” — Maya, Tax & Structuring Consultant, VelesClub Int.
“Before signing, price the total cost: purchase tax today, annual tax tomorrow, and exit tax later — that’s your real yield.” — Diego, Market Analyst, VelesClub Int.
Common mistakes (and quick fixes)
Forgetting that VAT/transfer tax depends on property type → confirm regime early.
Assuming rent is tax-free → check withholding and filing rules before listing.
No proof of transfer → keep MT103 and match the narrative to the contract.
Ignoring local surcharges → some cities add extra % on second homes.
FAQ
Is purchase tax always the same? No — it depends on price brackets, property type, and location.
Can I deduct expenses from rent? Often yes (management, repairs, interest), but rules vary.
Do double tax treaties remove all tax? No — they usually give a credit, not full exemption.
Does a company always reduce tax? Not necessarily; add admin and banking costs before choosing.
Next steps
If you want one plan that covers taxes, documents, and safe payments end-to-end, learn more about our services. VelesClub Int. supports buyers with compliant payments, due diligence, and coordinated closings worldwide.
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