How do countries tax real estate?

While many Asian real estate giants get rich by selling plots of land, people race to buy land to save, thereby pushing up house prices, which is unrealistic in many countries around the world. . So these countries have policies to fight property tax how?

In the US, real estate buyers will have to pay a variety of federal and state taxes. Even in some areas, property owners will have to pay some other taxes and fees, such as infrastructure development taxes or residential association fees, etc. to develop schools, hospitals, etc. institute.

Federal taxes are uniform across the United States, while state taxes vary by region. For example, in California, the tax rate is 1% on the total value of the home based on the purchase price, but in Texas it is 3%, but the house price here is cheaper than California.

In the US, real estate buyers will have to pay a variety of federal and state taxes. (Illustration image – Photo: New York Times)

According to experts, the relatively high land tax along with strict management makes it unrealistic in the US to buy a house to save as hoarding wealth or as a land fund to subdivide plots for sale. If you don’t pay taxes, the owner will be fined, if you don’t pay the penalty, the government will put the debt on the transaction record to deduct when selling the home.

In case the buyer borrows money from the bank, the loan interest will be deducted from the profit arising from the land, thereby reducing the owner’s tax payment amount. This is one of the main reasons why many US real estate giants like billionaire Donald Trump borrow money from banks even though they don’t lack capital.

The United States has applied a property tax for 226 years, while many countries around the world have also done the same to combat real estate speculation. Real estate prices in Europe without taxes are also quite high, making it difficult for many middle-income people to own their first home.

“The apartment is very nice. It’s 60 m wide², the new owner can even remodel at will. It costs 11,758 USD per m² and that’s why so many people can’t buy. It’s a pity,” said Mrs. Barbora Merknerova, a real estate consultant, Prague, Czech Republic.

In the UK, property taxes are divided into two categories: first home tax and second home tax onwards. In particular, the tax for the first home is quite light, only about 2% if the value is over 125,000 USD, if below this number, it will be tax free.

In Singapore, homes with a value of less than $8,000 are exempt from tax, and if more expensive, the tax rate is 4 – 16%. In particular, the property tax on abandoned houses is 10-20%.

In Finland, the property tax rate is around 1.2 – 2%, but commercial land exceeding $29,200 will be subject to a tax rate of 1.3 times.

In Korea, the property tax rate also fluctuates depending on the purpose of use. For example, if you use business land for luxury activities such as building a golf course or a luxury resort, you will have to pay 4%, while for ordinary houses it is only 0.1 – 0.4%.

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