ASSESSING HOUSING AFFORDABILITY: ANALYSIS OF PROPERTY TAX SYSTEMS IN EUROPEAN COUNTRIES

Abstract

This paper examines the relationship between property tax systems and housing affordability in European countries. The research contains not only theoretical section, but also empirical analysis. The statistical data used in research was extracted from Eurostat, OECD, and Tax Foundation. As housing affordability increasingly becomes a pressing issue in many European cities, understanding the role of property taxation in shaping affordability dynamics is crucial for policymakers, researchers, and stakeholders. Addressing housing affordability challenges requires a comprehensive understanding of the factors influencing housing costs, with property tax systems playing a pivotal role in shaping housing market dynamics. Through a comprehensive literature review, the paper explores existing research findings on the correlation between property taxation and housing affordability. Utilizing data from the Eurostat database, I conduct a comparative analysis of property tax collection statistics across Europe. It focuses on property tax revenues as percentage of total private stock. In assessing housing affordability, two key indicators were extracted from the Eurostat database: the housing cost overburden rate and housing costs as a proportion of disposable income. Housing costs encompass various expenses associated with dwelling occupancy, including utilities, maintenance, taxes, and insurance. The housing cost overburden rate measures the percentage of households where housing expenses exceed 40% of disposable income, providing insight into the burden of housing costs relative to income. Additionally, paper analyses the proportion of disposable income allocated to housing-related expenses, offering further insight into affordability trends. The findings contribute to understanding the impact of property tax systems on housing affordability in European countries. By evaluating the relationship between property taxation and housing costs, the strategies can be developed to mitigate housing affordability challenges and promote sustainable housing markets.

Keywords

• property tax
• housing affordability
• comparative analysis
• european countries