A new report from Eurostat, the official statistics office for the European Union, shows that on the basis of 2010 figures, Ireland is ahead of the EU average in terms of overall property tax yield and ranks seventh out of the 27 EU Member States.

The 2012 edition of the EU Annual Report Taxation Trends in the European Union has, for the first time, a chapter on property taxes within the European Union. Data on recurrent property taxes (annual charges) and transaction taxes (CGT, stamp duties and the like) are aggregated to show that the Irish tax yield from property in 2010 amounted to some €2.5 billion, or 1.6% of GDP. The EU average is 1.3% of GDP. Back in 2006, property taxes accounted for 2.8% of our GDP, almost double the then EU average of 1.5%.

What may come as a surprise, given the debate about the introduction of household charges and property taxes, is that Ireland is identified as already having a high level of recurrent taxes on property. When annual charges are identified separately, again Ireland ranks seventh among the 27 EU Member States with revenues of 0.9% of GDP, and again ahead of the EU average of 0.7% of GDP. It seems that the reason for this is the high level of commercial rates paid in this country. As the report dryly puts it, “revenue from taxes levied on the surface of the property occupied by businesses is substantial”.

As with all statistics, some caution must be exercised. Factors such as Mortgage Interest relief are not taken into account in determining overall property taxes, and arguably these should be considered when assessing the overall tax take from property. Equally, data from some EU Member States is not perhaps as robust as from others.

The full report is available at http://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/tax_structures/index_en.htm