Which are the best European countries to invest in real estate in 2025?

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Real estate investment has never been more popular in Central and Eastern European countries, where Lithuania and Hungary offer the best ROI for those who want to make money in the real estate market in 2025.

Lithuania is the best choice for real estate investments.

The best places to invest in real estate in Europe

In Lithuania, the capital Vilnius promises an average rental yield of 5.65%, according to the latest data from the Global Property Guide.

Rent prices are high in the country, more than 170% of what they were in 2015, according to the OECD. The income tax for rents is moderate (15%). Foreigners are not prevented from purchasing real estate.

According to Eurostat, property prices jumped by more than 10% in the second quarter of 2024 compared to the previous year, and the trend is expected to continue, providing a good return on investment.

Estonia is ranked as the second best choice for investors. Non-residents of the Baltic state are also allowed to purchase real estate in the country. Taxes are relatively low, but rental prices are high, giving an annual gross rental yield of around 4.5% (income tax for rents is 20%).

With house prices increasing by 6.7% in the year to June 2024, the value of the investment is expected to increase further.

Romania ranks third in this report, where the benefits include a relatively low additional cost of purchase, coupled with a very low average rental income tax rate of 10% and a relatively high gross rental yield of 6, 46% per year.

Ireland is also promising for real estate investment. The country offers high returns, mainly due to high rental prices, but high taxes could reduce net annual income. The country is facing a housing crisis, as there are not enough homes built for the growing population, while prices continue to skyrocket.

According to this report, there are also good real estate investment opportunities in Central and Eastern European countries such as Hungary, Slovenia and Poland, where rents are high (in Hungary, 180% of their 2015 level ), but where taxes are moderate.

House prices increased by 17.7% in Poland, 9.8% in Hungary and 6.7% in Slovenia in the 12 months to June 2024, according to Eurostat.

What are the least popular destinations?

Belgium, France and Greece appear to promise the least return on investment, according to this report.

Belgium has one of the highest transaction costs in Europe and the tax on rental income can easily reach 50%. The average yield is around 4.2%, but it can be higher in Brussels. House prices increased by 3.4% year-on-year during the second quarter of 2024.

France is considered the second worst choice for investing in real estate, according to the report, which highlights that taxes and purchasing and rental costs are relatively high. For example, the average tax rate on rental income for real estate investors is 18.28%. The annual gross rental yield is around 4.5%. According to Eurostat, French property prices have actually fallen by 4.6% this year.

Greece comes third in the list of worst countries for property investment, due to the high cost of purchasing and high levels of income tax, the average tax rate on rental income being above 33%, notes the report.

Where do people want to buy?

Spain and Portugal are the most popular destinations, according to the study which looked at the most popular countries based on Google searches.

Overall searches for buying a property reached 279,000 between 2023 and 2024 for Spain.

The country offers tax benefits to foreign investors, a standard rate of 19% for EU/EEA citizens or 24% for third-country citizens on taxable income (such as renting a property) in Spain .

The second most searched country is Portugal, with more than 270,000 searches for terms relating to the purchase of real estate in this country, where foreigners can buy real estate under the same conditions as locals.

However, the popularity of these two countries has led to a chronic shortage of affordable housing for residents. Nominal house prices have increased by almost 70% in Portugal since 2015, according to the OECD.

Please note: This information does not constitute financial advice, always do your own research to ensure it is suitable for your particular situation. Also, remember that we are a journalistic website and our goal is to provide the best guides, tips and advice from experts. If you rely on the information contained on this page, you do so at your own risk.