WRITTEN QUESTION E-2384/01

by Emilia Müller (PPE-DE) to the Commission

(20 August 2001)

Subject: Information on the taxation of owners of houses and plots of land

The ownership of real property, including houses, gardens and plots of land, and related issues such as the taxation of the owners are, in principle, the preserve of the national regulatory authorities.

Will the Commission, therefore, say:

- what the tax situation is in regard to the owners of houses and plots of land in the individual Member States,

- what European rules there are concerning the taxation of owners of houses and plots of land,

- whether it monitors and verifies the individual Member States' tax arrangements, and

- where I can obtain more detailed information on the tax situation in the Member States?

Answer given by Mr Bolkestein on behalf of the Commission

(12 October 2001)

When talking about taxation of land and real estate, we need to distinguish between direct taxes and indirect taxes.

Taking direct taxation of land and real estate first, there is no Community legislation in this field. National legislation in this regard nevertheless needs to be compatible with the principles of Community legislation on non-discrimination between, and free movement of, individuals and capital. Since this is not an area in which there is harmonisation, the Commission is not in a position to look at information provided directly by the Member States regarding their current legislation to monitor the situation routinely.

Moving on to indirect taxation, the common value-added tax (VAT) rules, based on the Sixth Directive (Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes(1)) give the Member States substantial discretion in defining the taxation arrangements for real-estate transactions.

The transitional options and provisions in this field for which the Sixth Directive provided have resulted in rules which vary widely between the Member States. In 1997, the Commission published an in-depth study on the application of VAT to the real-estate sector(2).

Two summary tables setting out the situation with regard to direct and indirect taxes on owner-occupied property, on new housing and buildings and on land are being forwarded direct to the Honourable Member and to Parliament's Secretariat. The tables illustrate the differences in national legislation.

(1) OJ L 145, 13.6.1977.

(2) European Commission, Directorate General Taxation and Customs UnionStudy on the application of Value Added Tax to the property sector Arthur Andersen, 1997.