Property Taxes8 min read

Capital Gains Tax on Property: A Global Comparison

28 March 2026Property Research Partners

Executive Summary

Capital gains tax is the silent partner in your property investment — taking a share of your profits when you exit. Unlike stamp duty, which hits on entry, CGT waits until you sell. This creates a deferred tax liability that grows with your unrealised gains, potentially altering your exit timing and total return calculus.

This analysis compares capital gains tax regimes across 15 major markets, examining rates, holding period exemptions, and structuring opportunities that can meaningfully impact after-tax returns.

Key Insight

Core takeaway: Capital gains tax rates on property range from 0% (UAE, New Zealand) to 45% (France, Denmark). On a property that doubles in value over 10 years, this tax differential can consume 45 percentage points of your total gain — turning a 100% pre-tax return into anywhere from 55% to 100% after-tax.

Capital Gains Tax Rates by Jurisdiction

Note

Methodology note: Rates shown apply to non-resident individuals or non-resident entities selling residential investment property, unless otherwise specified. Tax treaties may reduce these rates in specific circumstances. Local taxes and surcharges are included where significant.

Country	CGT Rate	Holding Period Exemption	Key Features
United Arab Emirates	0%	N/A	No personal income tax or CGT
New Zealand	0%	N/A	No broad-based CGT (bright-line rules apply)
Singapore	0%	N/A	No capital gains tax
Hong Kong	0%	N/A	No capital gains tax (profits tax may apply to trading)
Portugal	0%	N/A	Flat 28% on capital gains; excludes property sales for non-residents
Switzerland	0%	N/A	No federal CGT (canton wealth taxes apply)
United States	15-20%	None	Long-term capital gains rate; plus 3.8% NIIT; FIRPTA withholding 15%
United Kingdom	24%	None	Residential property gains; no indexation allowance since 2008
Australia	0-45%	50% discount after 12 months	Marginal income tax rate less 50% CGT discount
Canada	0-27%	None	50% of gain taxable at marginal rates (13.5-27% effective)
Germany	0-26.375%	10+ years for residential	Speculation tax if sold within 10 years; exempt after
Spain	19-28%	None	Progressive rates; 19% on first €6,000, 21-28% above
Italy	26%	None	Flat rate on capital gains; no distinction property/other
Netherlands	0%	None	Deemed return on savings/investments (box 3) instead of actual CGT
France	19-45%	None	19% flat + 17.2% social charges; possible additional tax
Denmark	0-42%	None	Share taxation rules may apply to property companies
Sweden	0-30%	None	22% municipal tax + 11.5% temporary defence tax

Sources: National tax authorities, OECD Tax Database, Deloitte International Tax Guide 2025, KPMG Individual Income Tax Rates 2025

The Holding Period Game

Several jurisdictions incentivise long-term holding through partial or complete CGT exemptions after specified periods:

Germany: The 10-Year Rule

Germany exempts capital gains on residential property held for more than 10 years entirely. Sell within 10 years and you face up to 26.375% tax on the gain. This creates a powerful incentive to hold — a 9.5-year hold versus 10.5-year hold can mean the difference between 26% tax and 0% tax.

Australia: The 50% Discount

Australia offers a 50% CGT discount on assets held longer than 12 months. For a taxpayer in the top 45% marginal bracket, this reduces effective CGT from 45% to 22.5%. This is less generous than Germany's exemption but applies after just one year.

United Kingdom: No Indexation

The UK eliminated indexation allowance (inflation adjustment) in 2008. Investors now pay tax on nominal gains, meaning a property that only kept pace with inflation generates taxable "gains." This creates a hidden tax on inflation itself.

CGT Impact on a 100% Capital Gain After 10 Years

Assumes property purchased at £500,000, sold at £1,000,000

After-tax gain as percentage of pre-tax gain. Excludes stamp duty and ongoing taxes. Assumes top applicable rate where progressive.

Structuring for CGT Efficiency

Corporate vs. Individual Ownership

In most jurisdictions, holding property through a corporation does not eliminate CGT — it transforms it. Corporate-level gains are typically taxed at the same or higher rates as individual gains, and extracting proceeds via dividends triggers additional tax.

Exceptions exist:

Netherlands: Corporate structures may enable participation exemption
Luxembourg: Holding companies can achieve tax-efficient exits under certain conditions
UAE Free Zones: Zero corporate tax enables tax-efficient accumulation

Treaty Shopping

Double tax treaties can reduce or eliminate CGT in specific scenarios. The UAE has an extensive treaty network (140+ agreements), many of which exempt capital gains on immovable property from source-country taxation if the seller is a UAE tax resident. This requires genuine substance — not merely a mailbox company.

Timing and Stacking

Tax Loss Harvesting: In jurisdictions that tax capital gains annually (US, UK), strategic realisation of losses can offset gains.

Income Smoothing: Realising gains in low-income years reduces effective rates in progressive systems (Australia, Canada, US).

Staged Sales: Selling property in tranches across tax years can keep gains below rate thresholds in some jurisdictions.

By Investment Strategy

Strategy	Hold Period	CGT Sensitivity	Optimal Jurisdictions
Core Buy-to-Let	10+ years	High	Germany (exemption), UAE, Singapore
Value-Add Flip	2-5 years	Very High	UAE, Hong Kong, Singapore, Portugal
Development	1-3 years	Critical	UAE only for high-return projects
Legacy/Estate	20+ years	Moderate	Low-CGT jurisdictions with treaty benefits
Trading/Flipping	<1 year	Critical	Zero-CGT jurisdictions only

Withholding Tax Traps

Even where CGT rates appear manageable, withholding taxes can create cash flow problems:

United States (FIRPTA): 15% withholding on gross sale price for foreign sellers, regardless of actual gain
Canada: 25% withholding on gross proceeds for non-residents, with potential for treaty reduction
Spain: 3% retention by buyer when seller is non-resident
Portugal: 28% flat withholding on gains for non-residents

These withholdings often exceed actual tax liability, requiring refund claims that can take months or years to process. They must be factored into exit liquidity planning.

Interaction with Other Taxes

CGT does not exist in isolation. The total exit tax burden includes:

Stamp duty recovery: Forms part of cost basis, reducing taxable gain
Depreciation recapture: In the US and some jurisdictions, accumulated depreciation is "recaptured" at higher rates on sale
Wealth tax adjustments: Some jurisdictions (France, Spain) adjust wealth tax basis on sale, creating timing mismatches
Exit taxes: Some jurisdictions tax unrealised gains on emigration or corporate migration

Important

The stacking effect: In France, a property gain can face 19% flat tax + 17.2% social charges + possible wealth tax + wealth tax penalties for non-compliance. Total effective tax can approach 45% — and that's before considering entry stamp duty and ongoing wealth taxes.

Market Sentiment on CGT Policy

Tax policy sentiment has shifted toward higher CGT scrutiny:

UK: CGT rates increased from 18/28% to 24% in October 2024 Budget
US: Proposals for alignment of capital gains with ordinary income rates (up to 37% federal) persist
Australia: Ongoing debates about reducing or eliminating the 50% CGT discount
New Zealand: Bright-line test extended from 5 to 10 years, effectively introducing CGT on investment property

The trend suggests CGT burdens will increase in coming years, not decrease. Investors should lock in current rates where possible through early structuring decisions.

Conclusion

Capital gains tax is the final filter on your investment returns. A property that generates 100% appreciation over your hold period may deliver only 55% after tax in high-CGT jurisdictions — or 100% in zero-CGT jurisdictions.

For long-term investors, jurisdictions with holding-period exemptions (Germany) or zero CGT (UAE, Singapore) offer structural advantages that compound over decades. For short-term investors, zero-CGT jurisdictions are virtually essential — high CGT rates make short-hold strategies uneconomical.

The optimal strategy combines jurisdiction selection with holding period planning. Know your likely exit timeline before you buy, and choose jurisdictions where the CGT regime aligns with your investment horizon.

FAQ

Can I avoid CGT by reinvesting proceeds? Generally no — unlike some jurisdictions' rules for shares or business assets, most property CGT regimes do not offer rollover relief for reinvestment. Portugal and some treaty scenarios are exceptions.

Does CGT apply to inherited property? In most jurisdictions, inherited property receives a "step-up" in basis to current market value at death, eliminating built-in gain. France and some civil law jurisdictions may apply inheritance tax instead, at different rates.

What happens if I sell at a loss? Capital losses typically offset capital gains in the same year. Excess losses may carry forward (US, UK, Canada) or carry back (Australia), but loss utilisation rules vary significantly.

How do I calculate my cost basis? Cost basis includes purchase price, stamp duty, legal fees, and capital improvements. Mortgage interest, repairs, and operating costs are generally not included in cost basis (though they may be deductible against rental income).

Are crypto-to-property swaps taxable? Yes — converting cryptocurrency to property is generally treated as a sale of the crypto, triggering CGT on any appreciation in the crypto's value. The property's cost basis is the crypto's fair market value at exchange.