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EU-ISRAEL TWINNING PROJECT

EU-ISRAEL TWINNING PROJECT. FDI / Real Estate Jerusalem , 28-31 October , 2013 Activity A.7, Balance of Payments. Delimitation of FDI / real estate. Selfmade definition

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EU-ISRAEL TWINNING PROJECT

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  1. EU-ISRAEL TWINNING PROJECT

    FDI / Real Estate Jerusalem, 28-31 October, 2013 Activity A.7, Balance of Payments
  2. Delimitation of FDI / real estate Selfmade definition ”Non-residents’ purchases or ownership of land and housing, primarily for non-commercial purposes, in the resident country”. From OECD’s 4th edition of Benchmark Definition ”An entity resident in oneeconomymayacquiredirectownership of land or buildings in anothereconomy. The relevant transactions, positions and associatedincome flows shouldberecorded in the FDI statistics of botheconomies.” pp.104 in BD4
  3. Outward FDI in real estateDenmark (bill. DKK)
  4. Inward FDI in real estateDenmark (bill. DKK)
  5. Data sources to the Danish FDI on real estate Until 5 yearsagothe ITRS was the source Only the outward FDI wasconsidered The stockswerecumulated flows (plus priceindex) When the ITRS wasstopped in Denmark in 2004, data for the followingyearswereprojected from the cumulated flows The method was changed appr. five years ago Information from TAX is nowused to estimateboth the inward and outward FDI on real estate
  6. InwardFDI TAX information Only persons with fiveyears of cumulatedresidence in Denmark canacquireproperty in Denmark In practice, the inward FDI is owned by Danish senior citizens, resident abroad (Spain, France) The estimates are based on the property taxes, and therefore on the government’s regular valuation of all Danish properties The statistics on inward FDI in real estate is allocated on countriesusingsupplementary information The quality is medium
  7. Outward FDI TAX information Primarily ”summerhouses” arong the Mediterranean Sea, Spain, Italy, France, Turkey but alsoSwedenand Norway The estimatesarebasedon Danish residents’ selfdeclarations to the TAX authorities The statistics on outward FDI in real estate is allocated on countriesusinginformation from TAX The quality is medium: it is in the investors’ (owners’) interest not to report (and paytaxes), or at least to underestimate the value of the investment The Danish TAX authoritiescooperate more and more with their EU colleagues to revealsuchownerships (subject for taxation)
  8. FDI real estate - income Denmark does not estimate the income from FDI real estate: FDI real estateconstitutesaround 1 % of the total FDI (stocks) Only a fraction of the real estate is rented out (Assumingthatincome from real estatewouldbe rent)
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