Part I

Overall tax revenue

Box 2.1:

Taxes on property - classification.

The classification of taxes on property applied in this report follows, with some adjustments, the approach employed in OECD

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(2011), which distinguishes six categories of property taxes: 1) recurrent taxes on immovable property; 2) recurrent taxes on
net wealth; 3) estate, inheritance and gift taxes; 4) taxes on financial and capital transactions; 5) other non-recurrent taxes on
property and 6) other recurrent taxes on property. The following comparative table between System of National Accounts
(2008 SNA) and European System of Accounts (1995 ESA) was used:
OECD classification
4000 Taxes on property
4100 Recurrent taxes on immovable property
4110 Households
4120 Other
4200 Recurrent net wealth taxes
4210 Individual
4220 Corporations
4300 Estate, inheritance and gift taxes
4310 Estate and inheritance taxes
4320 Gift taxes
4400 Taxes on financial and capital transactions
4500 Other non-recurrent taxes on property
4600 Other recurrent taxes on property

2008 SNA

1995 ESA ESA 95 classification

Taxation trends report

Taxes on property

D.59-8.63(a)
D.29-7.97(b)

D.59A
D.29A

Current taxes on capital

Taxes on land, buildings or other structures

D.59-8.63b
D.59-8.63b

D.59A
D.59A

Current taxes on capital

Current taxes on capital

D.91-10.207b
D.91-10.207b
D.59-7.95d;
D.29-7.96e
D.91-10.207a
D.59-8.63c

D.91A
D.91A

Recurrent taxes on immovable property

Taxes on capital transfers

Taxes on capital transfers
Stamp taxes
D.214B, C
Taxes on financial and capital transactions
D.91B
Capital levies
D.59A
Current taxes on capital

t
a
x

Other property taxes

For the purpose of this publication the overall level of property taxes is obtained by aggregating the revenue of the following
ESA categories: D.214B, C, D.29A, D.59A, D.91A, B. The total is split to recurrent taxes (D.29A+D.59A (excl. wealth taxes))
and other property taxes (D.214B, C + D.59A + D.91A, B). D.59A appears in the two groups of property taxes as wealth
related taxes were excluded from recurrent property taxes and included only in non-recurrent. Given the broad definition of the
statistical categories some additional adjustments were made such as excluding taxes on motor vehicles, roads, boats, farm
contributions, stamp taxes on alcohol, tobacco (from D.214B, C) and others from D.29A and D.59A in a number of countries
(BE, CZ, DK, FR, IT, CY, LV, AT, PL, PT, RO, SI and UK). The detailed list of taxes included in the computation of property
taxes for every country is available in the National Tax List published online at http://ec.europa.eu/taxtrends.
Possible discrepancies between results published by OECD and those presented in this report could stem from different
allocation of tax payments in the two classifications - OECD and National Tax List (ESA95) as well as from different timepoint of data reporting. With few exceptions, the results obtained for those countries which are included in both samples are
very close to the OECD data.

Overall, it seems likely that the deductibility of

mortgage interest largely offsets, or may even exceed,
the deemed revenue component. If that is true, this
would tend to reduce the net tax revenue from property
shown here.

Revenue from property taxes

Table 2.2 below shows the development since 1995 of
revenue from property taxes as such in the EU Member
States. Two features of property taxation stand out
clearly. One is that revenue levels differ very
substantially across Member States. While no Member
State exempts property completely from taxation,
revenue levels in the country with the lowest levels of
such taxes (Estonia, 0.4 % of GDP) are almost twelve
times lower than in the country with the highest level of
property tax revenues (the United Kingdom at 4.2 % of
GDP). The share of total property taxes on the overall
tax revenue also varies widely, from 1 % to 11.9 % (see
Table 2.3).

The level of property taxes correlates weakly with the

total tax burden: it is fairly low in a number of
countries with above-average tax levels (for example,
Austria or Germany), but there are also instances of
relatively high levels in countries with moderate overall
tax-to-GDP ratios (e.g. in Spain or the United
Kingdom).
Types of property taxes
Property taxes include different types of levies. One
important distinction is between recurrent taxes on
immovable property, which typically take the form of
annual payments due by the owner, whose amount is
linked to some measure of the value of the property,
measured at a point in time and periodically revalued
using an index; and transaction taxes that are typically
charged on the occasion of the sale or transfer of the
property (these include not only immovable property
but also net wealth and other non-financial and
financial assets).

Taxation trends in the European Union

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