CEPI - European Association of Real Estate Professions

In September the Commission published its annual report “Tax Reforms in EU Member States” which provides a detailed overview of tax reforms recently implemented in EU Member States. The report also identifies which EU Member States have scope to improve their performance in a number of key areas of tax policy. The report is prepared jointly by the European Commission’s Directorate-General for Economic and Financial Affairs (DG ECFIN) and Directorate-General for Taxation and Customs Union (DG TAXUD).

One of the issues examined is housing taxation. The report identifies several avenues to make housing taxation more efficient. It recommends that some Member States could consider shifting the burden from transaction taxes to recurrent housing taxes. Recurrent housing taxes are preferred to property sales taxes which can discourage labour mobility. Some Member States also provide generous tax relief for mortgages, which tends to have certain economic consequences such as higher levels of household debt and investment in housing. The report examines the user cost of housing investment in order to identify the potential need for a policy change in individual Member States.

The report is a basis for further analysis of the areas of tax policy which demonstrate room for improvement in certain countries. The conclusions will be complemented by the in-depth assessment of Member State economies which the European Commission carries out each year in the context of the European Semester.

The report is available at http://ec.europa.eu/economy_finance/publications/eeip/pdf/ip008_en.pdf.