JPA World Tax Game — Stage 19: Tax and Incidental Acquisition Costs of a Property through a Company
Stage 19 of the JPA World Tax Game compares the tax and incidental costs of acquiring, holding and eventually selling a residential investment property through a limited company across fifteen jurisdictions, from real estate transfer taxes and professional fees to corporate income tax on rental profits and property sale tax.
JPA World Tax Game — Stage 19: Tax and Incidental Acquisition Costs of a Property through a Company
Stage 19 of the JPA World Tax Game compares the tax and incidental costs of acquiring, holding and eventually selling a residential investment property through a limited company across fifteen jurisdictions, from real estate transfer taxes and professional fees to corporate income tax on rental profits and property sale tax.
The case study
Member firms were asked to apply a common scenario — a company acquiring land worth €200,000 and a property worth €500,000, financed on a fixed basis — to their local tax rules, and to compare real estate transfer taxes and stamp duties, legal and professional fees, brokerage commissions, annual property and wealth taxes, corporate income tax on rental profits, the deductibility of interest and operating expenses, depreciation allowances and any other relevant charges, across Austria, Bangladesh, Bulgaria, China, Cyprus, Finland, France, Germany, Iceland, Italy, the Netherlands, Panama, Poland, Portugal and the United Kingdom.
Acquisition costs
On a €700,000 acquisition, total transaction costs (transfer taxes, notary/solicitor fees and agent commissions) ranged widely — from around 2.7% in Iceland and Panama to over 23% in Cyprus, where the 21% real estate agent fee dominates the total cost despite the abolition of property transfer fees from 1 January 2026. Several jurisdictions cluster around 10–12% of the purchase price (e.g. Austria, Germany, Italy, Portugal and the UK), driven mainly by transfer/registration taxes rather than professional fees.
Rental income and corporate tax
On an assumed €48,000 gross rental income, net rental profit after amortisation, other taxes and standard costs varied significantly by jurisdiction — from a loss in Finland (driven by high amortisation and cost deductions) to over €35,000 in Italy, where minimal deductible costs are assumed. Corporate income tax rates applied to that profit ranged from 10% in Bulgaria to 30% in Germany, with Bangladesh applying a differentiated 22.5%–27.5% rate depending on listing status.
Exit taxation
Property sale tax rates on eventual disposal also diverge sharply, from 10% in Bulgaria and Panama up to 30% in Germany, with China standing out for its additional progressive Land Appreciation Tax of 30%–60% on the gain, on top of the standard corporate rate — a factor that can materially increase the overall tax burden on exit and should be modelled explicitly when comparing jurisdictions.
Key takeaway
The comparison underlines how significantly the total lifecycle cost of a corporately-held property investment — acquisition, holding and disposal — can vary between otherwise similar jurisdictions, reinforcing the value of jurisdiction-specific tax due diligence before structuring any cross-border real estate investment through a company.
Viraj Mehta – Tax Partner
Bourner Bullock, London (https://www.bournerbullock.co.uk)
