Central and Eastern European countries top the list for real estate investment, according to a new report.
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Lithuania and Hungary are among the best countries to invest in property, while Belgium and France are ranked among the worst, according to a new study by British removals company First Move International.
The report examines the key factors of real estate investment in European countries, such as property tax rate, income tax on rent, and gross rental yield, and finds that Lithuania is the first choice as the best country for real estate investment. It is suggested that.
Best place to invest in real estate in Europe
According to the latest data from Global Property Guide, Lithuania’s capital Vilnius promises an average rental yield of 5.65%.
According to the OECD, the country’s rent prices are more than 170% higher than in 2015. Income tax on rent is modest at 15%. There are no restrictions on foreigners purchasing real estate.
According to Eurostat, real estate prices rose by more than 10% year-on-year in the second quarter of 2024, and this trend is likely to continue, providing a good return on investment.
Estonia is considered the second best choice for investors. Non-residents of the Baltic states can also purchase real estate in the city. The purchase cost including tax is considered to be low at approximately 1.3%. On the other hand, rental prices are relatively high, with annual gross rental yields of around 4.5% and income tax on rentals of only 20%.
Property prices rose 6.7% in the year to June 2024, so the value of your investment could increase further.
Romania is ranked third in this report, with the advantages of relatively low additional purchase costs, a very low average rental income tax rate of 10%, and a relatively high total annual income tax rate of 6.46%. One example is rental yield.
Ireland promises high yields, mainly due to high rental prices, but higher taxes could put pressure on annual net profits. The country is facing a housing crisis as not enough housing is being built to accommodate the growing population as prices continue to soar.
According to the report, there are also good real estate investment opportunities in Central and Eastern European countries such as Hungary, Slovenia and Poland, where rents are high (180% of 2015 levels in Hungary) but taxes are modest.
In the 12 months to June 2024, house prices in Poland rose by 17.7%, in Hungary by 9.8% and in Slovenia by 6.7%, according to Eurostat.
Worst place to invest in real estate
Meanwhile, according to the report, the worst country to consider real estate investment is Belgium, closely followed by France and Greece.
Belgium has one of the highest transaction costs in Europe, and income tax on rent can easily reach 50%. The average yield is around 4.2%, but can be higher in Brussels. Real estate prices in the second quarter of 2024 increased by 3.4% compared to the previous year.
According to the report, France is considered the second worst country for property investment, highlighting relatively high taxes and costs for buying and renting. For example, the average rental income tax rate for real estate investors is 18.28%. The annual gross rental yield is approximately 4.5%. According to Eurostat, real estate prices in France have actually fallen by 4.6% this year.
Greece ranked third on the list of worst countries for real estate investment, due to high purchase costs and increased income tax levels with an average rental income tax rate of over 33%, the report said. .
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What Google can say about trends
This report looked at which countries are the most popular based on Google searches and found that Spain and Portugal were the top destinations for purchases.
Spain achieved 279,000 global searches for real estate purchases in 2023-2024.
Spain offers non-resident tax benefits to foreign investors: 19% for EU/EEA nationals and 24% for third country nationals on taxable income in Spain (e.g. rental of real estate). Standard tax rate of % applies.
The second most searched country was Portugal, with more than 270,000 searches related to buying real estate in the country, where foreigners can buy property on the same terms as locals.
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However, the popularity of these two countries has resulted in a chronic lack of affordable housing for local residents. According to the OECD, the nominal price of housing in Portugal has increased by around 70% since 2015.
Please note: This information does not constitute financial advice. Always do your own research to ensure it is appropriate for your particular situation. Also remember that we are a journalist’s website and aim to provide you with the best guides, tips and advice from the experts. Any reliance you place on the information on this page is strictly at your own risk.
