Analysis of Real Estate Taxation in the European Union’s Countries

Abstract

Taken as a whole, this study focuses on the analysis of real estate taxes in the European Union from 2006 to 2018. In this context and for this period, the data presented may suggest the orientation and correlation of property taxation with the tax base, depending on the stages of the business cycle. In other words, it aims to present a comparative and theoretical assessment of real estate taxation systems of the European Union countries between 2006 and 2018. The topicality and purpose of the topic lies in the fact that property taxation was one of the sources that generated important public funds necessary for the existence of states and contributed to their development. The level of originality of this study derives from the analysis of property taxes for the reference period and is presented in relation to other important macroeconomic indicators, while presenting the main real estate valuation systems used by EU states. Moreover, fiscal policies have made a significant contribution to correcting market failures. These were due to several factors, including the extreme exegesis of banks in lending between 2006 and 2018 which amplified the effects of the economic crisis that began in 2008, culminating in 2009 with a major economic recession; and in the EU it has translated into a significant decrease in GDP and tax revenue by 2.3% over the previous year. Consequently, a tax system designed in compliance with key principles, such as the neutrality of fiscal measures, certainty, fairness or the effectiveness of taxation, could help to achieve economic balance. And in this context amplified by changes in real estate, fiscal policy needs to be flexible enough to mitigate the future effects of national and international crises. In terms of the limitations of this study, we note the discrepancy between the data provided by the OECD and Eurostat, most likely due to the different calculation methodology, but which does not affect the conclusion that can be drawn from their interpretation. The interpretation of the results highlights the need for an individual analysis of property tax in each EU Member State.