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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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If you look at the web sites of the real estate agents in the United States I'm sure you'll find quickly articles labeled "To buy vs. to rent" where you will understand how profitable for you is to buy a given property instead of letting it.

There are multiple programs to encourage the first home buyers (and home buyers in general) in the US. The reason for this is obvious - more owners means more stable communities and lesser crime rates. In America to be owner means that you have a credit, that the financial institutions (at least one) have confidence in your work and/or your business. So, in one word, in most parts of the US to be owner is considered to be preferable that simply to let a house or apartment.

That's though not the case in other states, especially in Europe. For example, in Scandinavian countries (especially in Denmark, Sweden and Finland) if you care about your wallet it's more profitable to let an apartment, not to buy it.

Probably you have heard the sentence "Death and taxes" which indicates that there are only two things on the world the human being can't escape. I'm almost certain that you don't know where this sentence originated. IN the United States? Wrong, in Northern Europe. In countries like Sweden popular jokes about the tax-men are more numerous than the jokes about the Polish in the USA. The taxes in this country (as in some other Scandinavian countries too) are so huge that in the past the Swedish movie director Ingmar Bergman emigrated*.

You want proof? Imagine you want to be owner in Denmark, i.e. you want to buy a house or apartment in this country. If you are a foreigner and have lived in the country for less than 5 years you have to apply to and receive permission from the Danish Department of Justice. You may wait for this permission for weeks but this is nothing compared to what you have to expect later. When your application is approved, you'll have to pay a transfer tax - 25% of the sale price. More than that, in connection with the sale of some real estate, a deed is stamped by 0.6% of the sale price. In addition you will be charged a registration fee of something like $200 (fortunately now the dollar is strong against the euro).

But that isn't all. The mortgage loans obtained to finance the real estate purchase are subject to a stamp duty of 1.5%. The similar conditions for buyer are set in the other Scandinavian countries except that the transfer tax is smaller (3% in Sweden, 4% in Finland and 2.5% in Norway).

Maybe in Sweden is more profitable to buy a house? No way. In this country there is no equivalent to the generous tax breaks for the deduction of the mortgage interest payments that exist in the United States. The same restrictions (as in Denmark) apply for the foreigners who wish to become owners.

There is no need for a foreigner to have a special permission in Norway to buy a residential real estate. All costs concerning the operation of the property (including interests on loans) are deductible. The municipal tax on properties is also rather small compared with other Scandinavian countries - 0.2-0.7%. Instead there is a non-deductible investment tax of 7%. Some experts say that it may disappear from April 1st 2002. We may hope that this is not an April 1st joke.

So we see that to buy a residence in Scandinavian countries isn't only very expensive (the average prices are higher than in Europe in general) but it gets even more expensive given the local tax policies. On the other side the rent market is highly regulated by the state authorities. As a result it's indeed more profitable to let than to buy some real estate.

ENDNOTE: Given their large territories and relatively small populations I really can't understand (and I never will) why some Scandinavian countries are so afraid of foreigners moving there. Except for some German retirees or some Russians accustomed to long winters, nobody is rushing to move there (where the weather is really harsh). Maybe it's linked with the "besieged-castle mentality" of the Europeans than with some economic logic. But this is another story.

* - There were many more Swedes that did the same thing taking with them not only their families but their capitals too.

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