All countries
Which country charges the least capital gains tax when you sell a property?
On the same second-home sale, a gain of 100,000 in local currency by an owner earning 80,000, United States (federal only) charges the least at 15.0% of the gain and Ireland the most at 32.6%. That is a spread of 17.6% on an identical sale. There is no single cheapest country, because the answer changes with the size of the gain, how long you held it, and your other income.
| Lowest effective rate | United States (federal only), 15.0% |
| Highest effective rate | Ireland, 32.6% |
| Spread on an identical sale | 17.6% |
| Countries where a main home is normally exempt | All five |
| Countries where the rate depends on your income | UK, US, Australia, Canada |
| Countries with a flat rate | Ireland |
What does the same sale cost in each country?
One sale, five tax systems. A second home that was never a main residence, bought for 300,000 and sold for 400,000 in local currency, held five years, by one owner with 80,000 of other income.
| Country | Estimated tax | Effective rate on the gain | How it is charged |
|---|---|---|---|
| United States (federal only) | $15,000 | 15.0% | Long-term rate stacked on income. State tax is extra and is not included |
| Canada (Ontario) | $15,984 | 16.0% | One-half of the gain is included, then federal plus provincial rates |
| Australia | $16,000 | 16.0% | 50% discount past 12 months, then marginal rates plus the 2% Medicare levy |
| United Kingdom | £23,280 | 23.3% | 18% within the basic-rate band, 24% above, after a £3,000 allowance |
| Ireland | €32,581 | 32.6% | A flat 33% after a €1,270 exemption |
Local currency, not converted. Each figure comes from that country's own verified rules for its current tax year. Estimates for general information, not tax advice.
The United States figure is federal only. Adding a state such as California or New York can move it substantially, and states with no income tax leave it unchanged. That single omission is larger than the gap between several of the countries in this table, which is why the federal number should never be read as the whole answer.
Why do the systems differ so much?
Because they reduce the gain in three quite different ways before any rate is applied:
- A discount on the gain. Australia halves it after twelve months of ownership. Canada includes only one half of it. In both, the reduced figure is then taxed at ordinary marginal rates, so a high earner still pays a high rate on a small base.
- A separate lower rate. The United Kingdom and the United States tax the whole gain but at rates below their income tax rates.
- A flat rate. Ireland charges 33% whatever you earn, which makes it predictable, and comparatively harsh on someone with a modest income.
- An annual allowance. The UK gives £3,000 and Ireland €1,270. Australia, Canada and the United States give none, using the discount or exclusion instead.
The result is that a headline rate tells you very little. Australia's top marginal rate is far above the UK's residential rate, yet the discount can leave the Australian bill lower on the same gain.
Does your income change which country is cheapest?
In four of the five, yes, and it can reorder the table. Ireland is the exception: a flat rate does not care what you earn.
| Other income | UK | US | IE | AU | CA |
|---|---|---|---|---|---|
| 20,000 | £22,218 (22.2%) | $10,583 (10.6%) | €32,581 (32.6%) | $12,250 (12.3%) | $10,931 (10.9%) |
| 50,000 | £23,280 (23.3%) | $15,000 (15.0%) | €32,581 (32.6%) | $16,000 (16.0%) | $14,111 (14.1%) |
| 80,000 | £23,280 (23.3%) | $15,000 (15.0%) | €32,581 (32.6%) | $16,000 (16.0%) | $15,984 (16.0%) |
| 150,000 | £23,280 (23.3%) | $16,900 (16.9%) | €32,581 (32.6%) | $20,300 (20.3%) | $19,637 (19.6%) |
The same 100,000 gain at four income levels, in local currency. Income is shown as a bare number because it is 20,000 of local currency in each column, not a converted amount.
Read down the columns rather than across. The country that is cheapest for someone on a modest income is not always the cheapest for a high earner, which is the practical reason a single ranking of "lowest capital gains tax" is misleading wherever you find one.
What if it is your main home?
Then the five systems converge, because every one of them protects a main residence. The names differ and so do the conditions, but the outcome on a home lived in throughout is normally the same.
| Country | The relief | Estimated tax on the same sale |
|---|---|---|
| United Kingdom | Private Residence Relief | £0 |
| United States (federal only) | Section 121 exclusion, up to $250,000 single | $0 |
| Ireland | Principal Private Residence relief | €0 |
| Australia | Main residence exemption | $0 |
| Canada (Ontario) | Principal residence exemption | $0 |
The same sale, lived in for the whole five years. Conditions differ in each country and part-periods are apportioned, so a partial occupation gives a partial result.
The differences appear at the edges rather than the centre: how long you must have lived there, what happens if you moved out and let it, whether a second property can be nominated, and whether there is a cap. The United States caps its exclusion; the other four do not, but they apportion by time.
Can you move country to pay less?
This page prices tax systems. It does not tell you where to live, and treating a tax table as a relocation plan is how people get into trouble.
Residence for tax is decided by rules that have nothing to do with where a property sits: days of presence, ties, domicile, and in some cases where you were resident in earlier years. Several countries tax a former resident on a disposal for a period after they leave, and the United Kingdom taxes non-residents on UK residential property whatever their residence. Double taxation treaties then decide which country gets to charge, and relief is rarely automatic.
Compare all five countries side by side
Common questions
Which country has the lowest capital gains tax on property?
On the identical sale worked through above, United States (federal only) takes the smallest share of the gain at 15.0% and Ireland the largest at 32.6%. There is no permanent answer, because the ranking moves with the size of the gain, how long the property was held, and the seller's other income.
Are these figures converted into one currency?
No, and deliberately. Each figure is in its own local currency on a like-for-like gain of 100,000. Converting would introduce an exchange rate that has nothing to do with how a country taxes a gain. The effective rate column is the fair comparison.
Does the United States figure include state tax?
No. It is federal only. State capital gains tax varies from nothing to a substantial additional charge depending on where the property and the seller are, and that difference is larger than the gap between several countries in the table. Treat the federal figure as a floor.
Do all five countries exempt your main home?
All five give relief on a main residence, under different names and conditions: Private Residence Relief in the UK, the Section 121 exclusion in the US, Principal Private Residence relief in Ireland, the main residence exemption in Australia and the principal residence exemption in Canada. Only the US caps the amount; the others apportion by the time it was your home.
Which country is most predictable?
Ireland, because the rate is flat at 33% regardless of income. That predictability cuts both ways: it does not fall for a seller on a low income the way a banded system does.
Can I avoid the tax by moving abroad before I sell?
Not reliably, and this site does not advise on it. Residence for tax is decided by day counts, ties and prior residence rather than by intention, several countries continue to tax a former resident for a period, and the UK taxes non-residents on UK residential property regardless. A cross-border sale needs an adviser qualified in both countries.