Countries without property tax: where can you avoid tax expenses?

Property tax exists in most countries around the world, and its amount depends on the overall market value of your real estate. In some countries, this tax is collected annually, while in others it is collected every six months. However, there are countries where property tax is completely absent or where its amount is minimal and symbolic. In this article, we will present the full names of the countries where property tax is not imposed on residents and non-residents, as well as discuss places where it exists in insignificant amounts.

Before purchasing real estate in a country with no property tax, it is important to pay attention to the stamp duty. This duty is usually a form of tax that authorities collect during real estate transactions. The good news is that this fee is typically paid only once and does not require regular payments.

Countries that do not impose property tax on residents and non-residents

• Bahrain
• Georgia
• Dominica
• Israel
• Cayman Islands
• Cambodia
• Qatar
• Kuwait
• Liechtenstein
• Malta
• Monaco
• Oman
• Turks and Caicos
• Cook Islands
• United Arab Emirates
• Saudi Arabia
• Seychelles
• Thailand
• Faroe Islands
• Fiji
• Croatia
• Sri Lanka

Features of tax legislation in the specified countries

Bahrain

Bahrain, located in the Persian Gulf, is renowned for its rich history that dates back to ancient times, and today it is a rapidly developing financial and tourist center.There is no property tax in Bahrain.Both in sales and in rentals, this applies to both residential and commercial properties. There is also no tax on new buildings.

Instead, the authorities impose a stamp duty on2% of the property price, which decreases to1.7%if it is paid within60 dayssince the conclusion of the deal.

Georgia

Georgia offers its citizens and residents to pay a property tax, which amounts to1%from the market value. If the income during the year does not exceed40,000 lariApproximately17,000$), no tax is levied. However, land plots are subject to a different rate:0.24 lari(0.08$) per square meter.

Dominica

Dominica, an amazing tropical island, stands out for its reverence for nature and commitment to eco-tourism.There is no property tax here.However, in some municipalities, such as Caefield and Rozo, local taxes have been established that average1.27%from the cost of the property. A fee is also paid for renting it out.1%income tax.

Israel

In Israel, property owners are required to pay municipal fees known as Arnona, which vary depending on the area and location. On average, the monthly fee is about60 dollars(200 shekels). There are preferential conditions for certain categories of citizens, such as newly arrived immigrants.

Cayman Islands

The Cayman Islands, consisting of three picturesque islands in the Caribbean Sea, attract tourists not only with their natural beauty but also with favorable tax rates.There are no property taxes there.Income of individuals, corporate profits, capital gains, VAT, and other taxes. This attracts the attention of investors and those looking for favorable conditions for doing business and living.

Thus, life in countries without property tax becomes comfortable and advantageous; however, any investments require careful analysis and understanding of local rules and fees. We hope this information helps you successfully navigate your choice of country for purchasing real estate.

The Cayman Islands have neither a gift tax nor a capital gains tax, making it a true tax haven. There are many other countries with low or zero taxes. For example, Cambodia has an annual property tax, but its rate is extremely symbolic, at just 0.01% of the property's assessed value. If you bought a house in Cambodia for $200,000, the property tax would only be $200. Additionally, this country has a stamp duty of 4% of the property's price.

Taxes on rental income in Cambodia

Regarding the rental income tax in Cambodia, it varies depending on whether the landlord is a citizen of the country or a foreigner. For Cambodian citizens, the tax is 10% of the gross rental income, while non-residents are subject to a higher tax rate of 14%. The gross income includes the amount specified in the rental agreement. For example, if a local resident rents out a property for $500 a month, the rental tax will be $500 * 10% = $50 monthly, which totals $600 for the year. If the same rental amount is received by a non-resident, the tax will be $500 * 14% = $70 monthly, which amounts to $840 for the year.

It should be noted that these tax rates apply to the total rental income. For example, if a Cambodian citizen rents out a five-room house at $800 per room, the tax will be ($800 * 5) * 10% = $400 per month, which amounts to $4800 per year.

Property taxes in other countries

Qatar showcases its unique tax policy, as property owners are not required to pay property taxes. This means that individuals owning both residential and commercial properties do not have to pay taxes based on the value of their property. This policy stands in stark contrast to the practices of many other countries, where property taxes constitute a significant portion of local government revenues.

Kuwait

Kuwait, known for its attractive standard of living, is famous for its modern achievements while preserving a rich culture. This country, with a rapidly developing economy and outstanding strategic location, is filled with modern buildings and skyscrapers that symbolize the region's success. In Kuwait, there is no property tax. However, rental income is taxed at a rate of 10%. For example, if you rent out a property for $1,000 a month, your annual income would be $12,000, and accordingly, the rental tax would be $12,000 * 10% = $1,200.

Liechtenstein

Liechtenstein also does not impose property taxes. However, it is important to note that the sale of real estate may be subject to capital gains tax, which can reach up to 24%. This tax may also apply to the sale of a controlling stake in a real estate company. In Liechtenstein, rental income is subject to a progressive tax rate ranging from 3.24% to 17.01%. Local authorities may additionally levy a tax that can reach up to 180% of the basic income tax.

Malta

In Malta, there is no inheritance tax; however, there is a withholding tax on the transfer of movable property, which ranges from 5% to 12%. Additionally, a stamp duty of 5% applies to both residents and non-residents when transferring real estate, but a reduced rate of 2% is set for the island of Gozo. It is important to note that real estate in Malta is not subject to taxes, but rental income taxes can reach up to 15%.

Monaco

In Monaco, there are also no property taxes. In the case of rental properties, the tax on rental income is 1% of the annual income; however, this burden usually falls on the tenant.

Real estate, as well as income received by both individuals and legal entities, capital gains, and inherited assets in this region are not subject to tax. The Cook Islands are an independent territory of New Zealand and consist of 15 islands and atolls. There is no inheritance tax, wealth tax, or capital gains tax in this location. However, purchasing real estate on these islands may require careful consideration and additional steps.

Real estate in the United Arab Emirates

There is no national property tax in the United Arab Emirates. However, property owners and tenants may be required to pay local fees. For example, in Dubai, a municipal tax on residential and commercial properties has been introduced, which amounts to:

• 5% of the annual rental value for residential property,
• 2.5% for commercial properties.

Typically, the tax on commercial properties is levied on the owners, while tenants of residential properties are responsible for the taxes on residential real estate. It is important to note that since June 2023, a corporate tax of 9% has been introduced in Dubai on incomes exceeding 375,000 dirhams. This tax affects all companies and individual entrepreneurs operating in the local market, except for those located in free trade zones.

Investments and obtaining a "golden visa" in the UAE

When purchasing real estate in the UAE, you can obtain“golden visa”through investments.

Real estate in Saudi Arabia

In Saudi Arabia, there are no property taxes, but there is a tax on undeveloped land. This tax requires owners of vacant lots located in urban areas and designated for residential or commercial use to pay an annual tax of:

• 2.5% of the market value.

In addition, when selling real estate, a transaction tax is imposed, which is 5% of the total transaction amount. This tax applies to all real estate properties, regardless of their condition at the time of sale.

Real estate in the Seychelles

In the Seychelles, residents are exempt from paying property tax. Non-residents, however, must pay a tax of 0.25% of the value of their residential properties, such as apartments and villas. As for the property acquisition tax, also known asstamp dutyIt is 5% of the sale price for individuals and companies registered in Seychelles.

For non-residents, the rates can vary from 11% to 17.5%. There is usually also a notary fee of about 2%. Non-residents earning rental income are subject to a fixed tax rate of 15%.

Real estate in Thailand

Since 2020, Thailand has introduced an annual tax on residential property ownership. However, for foreign condominium owners, this tax remains relatively low. They are required to pay 0.03% of the assessed contract value only if that value exceeds 10 million baht (approximately 274 thousand dollars).

When purchasing property in Thailand for the first time, you will also need to pay a transfer tax, which is 2% of the assessed value. Typically, this tax is paid by the seller, but it can be split between the parties depending on the agreement. Detailed information about taxes can be found in local sources. Non-residents earning rental income in Thailand are also subject to a fixed tax rate of 15%.

Real estate in the Faroe Islands

The Faroe Islands are in an interesting situation. If you are a tax resident of this region, the authorities can levy taxes on any income earned from renting property outside the country. For non-residents, although there is no property tax, notification of rental income from their property is required. Even if income from renting foreign property is not subject to taxation, it must be declared in order to receive tax deductions.

Real estate in Fiji

Fiji, located on the eponymous archipelago between New Zealand and Hawaii, does not have state-level property taxes. However, local authorities may set their own rules regarding this tax, so it is important to carefully examine each specific case.

Real estate in Croatia

In Croatia, only property owners of tourist accommodations are taxed, contributing between 5 to 15 kunas (approximately 0.7 to 2 euros) per square meter to the municipal budget. The transfer tax when purchasing real estate is 3% of its market value at the time of the transaction. This rule applies to both citizens of the country and foreign buyers.

The income tax on rental income for residents and non-residents will be 12%. For rental income not related to tourism activities and not exceeding 40,000 euros per year, the rates range from 7% to 8.2%. When renting property for tourism purposes, tax residents of Croatia can take advantage of a simplified fixed tax determined by local municipal authorities.

Conclusion

In conclusion, the topic of property tax remains relevant and deserves extensive discussion among potential buyers and investors. I outlined the situation in various countries where such a tax is absent or minimal. This is an important aspect for those considering purchasing real estate abroad. However, as I emphasized, it is worth paying attention to the presence of other taxes, such as stamp duty, which can be seen as an alternative to property taxes.

Countries moving away from property tax, such as, for example,Bahrain,GeorgiaorMaltaThey offer interesting opportunities for investment and living. However, anyone considering purchasing real estate should keep in mind the tax obligations, even if they are just one-time expenses. Researching and understanding the tax environment will help avoid unpleasant surprises and make the investment process safer.

Key points for investors

• Study the tax obligations.in the chosen country.
• Please pay attention to the stamp duty.and other possible taxes.
• Explore citizenship acquisition programsthrough real estate investments.

Therefore, before taking the final step and purchasing real estate, it is important to conduct a thorough analysis not only of the legal conditions but also of the tax aspects. I am confident that understanding all the nuances will help you ensure the correctness of your choice and ease your adaptation to the new conditions. Investing in real estate abroad is not only an opportunity for financial gain but also a chance to discover a new culture and way of life.