Expats with homes in troubled Eurozone states face threat of wealth tax

Published:  16 Apr at 6 PM
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Following the EU’s Cyprus savings grab, expat residents in other troubled Eurozone countries may be subject to a wealth tax on their properties in support of possible bailouts.

Senior advisors to the German chancellor Angela Merkel are strongly suggesting that wealthier households in weaker Eurozone member states should be forced to contribute to the cost of future bailouts. The council of advisers, known as the Five Wise Men, is known for testing out new policies due to be officially adopted at a later date.

The proposals raise the likelihood of property taxes being introduced in, for example, Spain, should its government be forced into a bailout situation. Even Britons with holiday homes in affected countries might not be exempt from the tax, even although the UK is not part of the Eurozone.

Spain in particular is though to be at risk from the proposal as its southern regions, home to around 400,000 Britons, are in deep recession and threatening Madrid’s attempts at a balancing act to avoid a bailout. The German advisory council is arguing that rich home owners in Greece, Portugal and Spain have not contributed to the rescue of the euro, leaving Germany to pick up more than its fair share of the bill.

Taxes on assets and property would be a significant change in policy for the EU, with investors and savers bearing the brunt to date. Prof Peter Bofinger said earlier this week that levies on bank accounts are not the right way to fund bailouts, as the rich can easily shift their money to an offshore haven to avoid deductions.

Whether Merkel acts on the proposal or not, the news is likely to spur further falls in property prices in the weaker Eurozone states. Combined with the accelerating expat rush to leave, it’s unlikely to solve economic problems but very likely to create more.
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