Landlords in Europe A Comparative Analysis Launch Event 12 - - PowerPoint PPT Presentation
Landlords in Europe A Comparative Analysis Launch Event 12 November 2013 European Parliament About UIPI: Union Internationale de le Proprit Immobilire (UIPI) Founded in Paris during 1923 Headquarters transferred to Brussels in
– Founded in Paris during 1923 – Headquarters transferred to Brussels in 2006
– 5 million property owners – Covering more than 20 million dwellings – Through 30 member associations – Across 28 countries
– 3.5 million private landlords (both domestic and commercial) – 1.5 million home-owners and condominium co-owners
Republic
– Academic and theoretical research already exists – Focus on PRS from a practitioners point of view – Highlighting the key issues which landlords face
– At Local, Regional, National and EU levels – All with different legislative frameworks
– Good quality, affordable private rented housing – And a stable and sustainable sector across the EU
– Providing essential accommodation for European citizens – Supporting the European economy
– Credit crunch caused affordability issues for home-ownership – Resulting in a significant increase in the demand for rented housing – 18.1% of European households lived in the PRS in 2011
– Although not within EU competence – Increased focus on housing market and property taxation – Through policies such as European Semester – And work undertaken by URBAN Intergroup
– The main characteristics – Strengths and weaknesses – In national regulation
– Legislative Frameworks – Property Taxation – Planning and Zoning
– Only 5 countries have laws regulating the initial rent – Limited right to increase rents during the tenancy in 7 countries
– More than 80% of countries require written tenancy agreements – Most countries allow parties to negotiate clauses in the tenancy – Additional requirements on the contents in some countries – Registration of the tenancy is necessary in 5 countries
– Security deposits are common across all countries – 10 countries have regulations governing the amount, use and repayment of deposits to tenants.
– Regulations governing tenancy duration exist in all countries – Freedom to negotiate is stronger in 3 countries – Fixed term contracts exist in most countries – Minimum statutory period on tenancy exist in 8 countries – Unlawful to set a minimum duration in Germany
– Landlords are usually responsible for maintenance and major repairs – Tenants are required to inform landlords of defects
– It is much easier for tenants to end tenancies than landlords – Fixed-term tenancies end on expiration in some countries – Most countries require landlords to provide legitimate reasons – France and Italy do not allow termination by the landlord; only the refusal to renew the contract
– Landlords must usually follow a two-stage process – Process takes between 6 months and 3 years – This can be sometimes an extremely expensive process – Some countries have accelerated procedures for rent arrears
Pro-landlord
Czech Republic United Kingdom
Neutral
Greece Slovakia Norway
Pro-tenant
Austria Belgium France Germany Ireland Italy Spain
– No weaker party, so no need for protective provisions – Greater contractual freedoms to negotiate clauses – No regulation of initial rent levels – Rent increases only regulated in 4 countries – Less restrictive termination rights
– Restrictions on minimum duration vary considerably – Greece has the longest minimum tenancy duration – Refusal to prolong tenancy requires compensation in 2 countries – Belgium and France have stricter provisions than residential tenancies
Pro-landlord
Czech Republic Germany Norway Slovakia Spain United Kingdom
Neutral
Austria Ireland
Belgium France Greece Italy
– All countries levy a tax on the purchaser except Slovakia – Either a Registration Fee, Stamp Duty or Transfer Tax – Most countries base tax on purchase price – Actual property value is used in some countries
– Capital Gains Tax (CGT) exists in all countries – Most countries treat CGT as income tax at the same rates – However, a separate Capital Gains Tax is levied in 4 countries – Most countries have some exemptions or reductions to CGT
with the lowest transaction taxes
– Taxed at the same rates as other income in many countries – Rates depend on whether landlord is an individual or corporate entity – Spain and Norway use net income as tax base – Common expenses can be offset in these countries
– No trends exists within case study countries – Tax is based on property value in most countries – Rates vary significantly (percentages or fixed fees) – Most are levied on landlord (except UK)
– Value Added Tax (VAT), Inheritance Tax (IHT), etc.
– Planning policy is designed to create enjoyable environment – Regulation is overly complex and not effectively used – Stringent obligations placed on landlords at all stages – Property owners play limited role in policy formulation – Greece has an extremely complex planning system
– Implementation of planning regulation is decentralised – Planning permission required for new buildings in all countries – 4 countries have mandatory requirements to consult local residents on all applications
– Universal Declaration on Human Rights – European Convention on Human Rights
– Governments must demonstrate public need outweighs human right – Fair compensation must be provided – Expropriation must take place in a timely manner
– Determination of compensation is problematic in many countries – Expropriation is very rarely used in Germany or UK
– “One size fits all” policies will be detrimental to most markets
– Onerous legislative and tax burdens result in diminished supply of affordable housing – Complex legislative frameworks discourage investments in the private rented sector
– Simplify tenancy, planning and building norms – Avoid excessive taxation of property compared to other forms of capital – Balance the needs of all housing tenures and not to distort the market