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In many regions of Switzerland, buying a house has become a privilege for wealthy people. Only 36 percent of the population still lives within its own four walls. This puts Switzerland at the bottom of the list in Europe. But high ownership rates can also give the completely wrong impression about the dream of owning a home.
In countries such as Portugal, Spain, Italy and Greece, fewer and fewer locals have the opportunity to own their own home. One of the reasons for this is the tax policy of Mediterranean countries. As if inspired by the Swiss tax system, which favors the super-rich, these countries have become tax havens for the wealthy and retired, thus actually increasing property purchases by foreigners in recent years.
The Portuguese are bored
In Portugal, high property prices brought people to the streets only in September. The public protest has now reached the Social Democratic government. As NZZ reports, the tax policy will most likely end with the new state budget in 2024. As a tax haven, Portugal has attracted retirees from countries like Germany, England, Norway and Switzerland, who are having a really good time here in their twilight years.
Foreigners now make up more than ten percent of property buyers. For many, house prices in Portugal still seem very affordable. Foreign demand causes prices to rise even further. Especially in high-income tourist areas such as the Algarve or metropolitan areas such as Lisbon. From 2015 to 2022, property prices in Portugal have almost doubled.
Yield sharks conquer Spain
There is no tax privilege in Spain. Attractive returns attract the attention of foreign buyers. 25 percent of properties sold in 2022 went to foreign owners. In response to the increasing tourist demand, they invest in holiday homes and buy them in touristic regions and cities. The most common foreign buyers are the British, followed by the Germans and the French, who together account for almost 30 percent.
Italy is also very popular among foreign buyers due to its low prices and tax advantages. Newcomers pay taxes on only 30 percent of their income for the first five years. Additionally, capital gains tax no longer applies after five years. But prices in Italy have risen much more modestly in recent years, and before that they fell for several years until 2020.
Pensioners invaded Greece
However, the number 1 tax haven is Greece: Foreign retirees pay only 7 percent income tax in the first 15 years. In addition, since the price level is still low in Greece and the returns are higher than in Europe, many purchases are made for investment purposes. You can also earn good money with Airbnb apartments in the center of cities such as Thessaloniki or Athens. This continues to raise the price level. From 2017 to 2023, property prices increased by around 50 percent.
Although ownership rates in Spain, Portugal and Greece remain high at 73 percent everywhere, the tourism boom and tax concessions for foreigners are displacing locals as buyers.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
