A study conducted by Global Property Guide, with contributions from leading accounting firms in each country, states that the effective income tax rate in Geneva, Switzerland can be as high as 48.6% on a rental income of EUR1,500/month and 54.5% on income of EUR12,000/month.

Other OECD member countries that impose high effective tax rates (above 20%) have also been highlighted, and include the US, Norway, Spain and Finland.

In Norway, the flat 28% rental income tax is combined with a progressive capital tax, whilst Spain charges 24% withholding tax on the gross rental income of non-resident foreigners.

The importance of deductions is also highlighted in the case of France. The nominal income tax rate for non-residents is high at 25%. In the UK, personal deductions combined with depreciation and costs are higher than the assumed gross income of EUR1,500 per month (EUR18,000 per year), leading to zero taxable income.

Effective rental income tax rates are generally below 10% in Luxembourg, France, Japan, South Korea, Mexico, New Zealand and the UK, whilst non-resident landlords in the US and Canada are given the option to choose between ‘gross’ or ‘net’ income taxation. The gross income tax rate is high but the process is very simple; no deductions, no allowances, and no accountants involved.

Commenting on the social implications of higher rental income taxes, the study concludes by arguing that: "Higher marginal taxes on rental properties are argued to be pro-poor because of the perception that landlords and property owners are typically rich, thus should be taxed more. The perception is amplified when taxing non-resident foreigners."