Statistics show that lately, investors are most attracted to foreign real estate in Turkey, the UAE, Indonesia, Portugal, and Cyprus. The common denominator for these markets is the rapid rise in housing prices. Although the investment costs vary.
In this article, we will reveal all the additional costs of investing in real estate in the mentioned countries, so that it will be easier for you to decide which market to invest in for 2024.
Turkey
The buyer mainly covers the cost of additional expenses. They include:
When purchasing an apartment in a new building, one-time payments are added:
Subsequent annual expenses will consist of:
If you resell the property in less than 5 years, you will have to pay a tax calculated on a progressive scale depending on the amount of income received. It can range from 15% to 35%. The income tax from rent is calculated similarly.
Cyprus
Investors in residential real estate in Cyprus can expect the following expenses:
If the income from the sale of real estate exceeds €17,068, the profit tax will be 20%.
The annual tax on Cypriot real estate has recently been abolished. Basic maintenance costs will include:
When reselling the property, you will need to pay 3–8% to the real estate agent.
The right to rent out housing is available only to investors with a "golden visa". Depending on the level of income, the profit tax will range from 0% to 35%.
Portugal
Taxes and fees when investing in Portuguese real estate are quite high. The buyer will need to pay:
Property owners in Portugal are required to pay annually:
For non-residents, the rental income tax is 25%, and the profit tax from resale is 28%.
Bali, Indonesia
It is almost impossible to purchase full ownership of real estate in Bali — there is a long-term lease system (for example, for 50 years). Nevertheless, when investing, a number of payments will be required, which are calculated from the total cost of the property.
In the future, maintenance costs will consist of:
The transfer of long-term lease rights, or "sale" of real estate, also involves payment of tax fees.
Despite such conditions, demand for investment in Balinese real estate remains quite high.
UAE
The Dubai government has been working in recent years to attract investors from around the world, so they have created favorable conditions for them. When purchasing a property, the following payments will be required:
Expenses for maintaining real estate can be:
The tax on rental income from real estate in the UAE is 5% for income over €95 000, and the tax on resale is 2%.
In conclusion, we compared additional expenses when investing in real estate in five popular markets. We present our top countries with the most favorable conditions:
In this article, we will reveal all the additional costs of investing in real estate in the mentioned countries, so that it will be easier for you to decide which market to invest in for 2024.
Turkey
The buyer mainly covers the cost of additional expenses. They include:
- Property registration tax — 4% of the cadastral value
- Registration fee at the Cadastre Office — 40 €
- Translator services when transferring property rights — 40 €
- Earthquake insurance (DASK) — 15 €
- Mandatory real estate appraisal — 200 €
- Utility connection fees — 70 €
When purchasing an apartment in a new building, one-time payments are added:
- Permission to use the property (ISKAN) — from 350 € for one apartment
- Water and electricity connection — 150 €
Subsequent annual expenses will consist of:
- Monthly service payments for the complex - approximately 35 — 45 €
- Annual property tax — 0.1–0.6% of the cadastral value (50–100 €)
- Utility bills — on average from 55 to 80 € per month
If you resell the property in less than 5 years, you will have to pay a tax calculated on a progressive scale depending on the amount of income received. It can range from 15% to 35%. The income tax from rent is calculated similarly.
Cyprus
Investors in residential real estate in Cyprus can expect the following expenses:
- VAT when purchasing a new building — 5% for the first 130 sq.m. of the property not exceeding €350 000 or 19% in other cases
- Title deed fee when buying second-hand property — from 3 to 8% of the total value
- Stamp duty — from 0.15 to 0.2%.
If the income from the sale of real estate exceeds €17,068, the profit tax will be 20%.
The annual tax on Cypriot real estate has recently been abolished. Basic maintenance costs will include:
- Utility bills — on average 180 € per month
- Property insurance — around 40 €
When reselling the property, you will need to pay 3–8% to the real estate agent.
The right to rent out housing is available only to investors with a "golden visa". Depending on the level of income, the profit tax will range from 0% to 35%.
Portugal
Taxes and fees when investing in Portuguese real estate are quite high. The buyer will need to pay:
- Property transfer tax — up to 6.5%
- Stamp duty — 0.8% of the cadastral value
- VAT on new buildings — 19% (often included in the price)
- Lawyer fees — up to 1.5% of the transaction amount
- Notary fees — 260 €
- Broker fees — 3–5% + VAT (21% of the commission)
- Tax number registration — 7.5 €
- Title deed fee — from 250 to 400 €
- Utility connection fees — from 100 to 200 €
Property owners in Portugal are required to pay annually:
- Property tax — from 0.3% to 0.8%
- Mortgage insurance — from €180 to €380
- Utility bills — up to 180 €
- Complex maintenance — from 50 € to 250 € per month
For non-residents, the rental income tax is 25%, and the profit tax from resale is 28%.
Bali, Indonesia
It is almost impossible to purchase full ownership of real estate in Bali — there is a long-term lease system (for example, for 50 years). Nevertheless, when investing, a number of payments will be required, which are calculated from the total cost of the property.
- Long-term lease transfer tax — 5%
- Sales tax — 1%
- Lawyer fees — from 0.5% to 1.5%
- Notary fees — 1%
In the future, maintenance costs will consist of:
- Utility bills — 55 €
- Annual property tax — 0.5%
- Construction and land tax — from 0.1 to 0.2%
The transfer of long-term lease rights, or "sale" of real estate, also involves payment of tax fees.
- Tax on the transfer of long-term lease rights — 5%
- Brokerage services — 5%
- Registration fee — 0.2%
Despite such conditions, demand for investment in Balinese real estate remains quite high.
UAE
The Dubai government has been working in recent years to attract investors from around the world, so they have created favorable conditions for them. When purchasing a property, the following payments will be required:
- Land department fee (if necessary) — 2%
- Administrative fee — 10 €
- Registration fee — from 505 to 1010 € plus VAT 5%
- Brokerage services — on average from 2 to 4%
- Lawyer services — 2000 €
- DEWA registration — from 500 to 800 €
Expenses for maintaining real estate can be:
- Annual property ownership tax — 0.25%
- Home insurance (optional) — 185 €
- Utility bills — 155 €
- Complex maintenance — on average 3 € per sq.m.
The tax on rental income from real estate in the UAE is 5% for income over €95 000, and the tax on resale is 2%.
In conclusion, we compared additional expenses when investing in real estate in five popular markets. We present our top countries with the most favorable conditions:
- Dubai, UAE
- Turkey
- Bali, Indonesia
- Cyprus
- Portugal