Countries without property tax: where can you buy housing without additional expenses?

Property tax is a significant element of the financial system in many countries and its rate varies depending on the value of the property. Nevertheless, there are countries where this tax is either absent or its amount is extremely small. In this article, we offer a list of states that have eliminated the property tax for their residents and foreigners, or have it in minimal amounts. In addition, before buying a home in such regions, it is useful to pay attention to the registration fees that may be charged during the registration of the transaction. The convenient news is that such fees are usually paid once.

Countries without property tax

Among the countries where there is no property tax, the following can be highlighted:

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

Details about countries with no property tax

Now let's take a closer look at several countries where there is no property tax.

Bahrain

In Bahrain, there is no tax on the sale or rental of land and buildings, including both residential and commercial properties. New construction projects are also protected from tax liabilities. However, it is important to remember that when registering property, a stamp duty must be paid, which amounts to2%from the market value of the property, and can be reduced to1.7%if payment is made within60 daysafter the deal.

Georgia

As for Georgia, in this country, individuals, including citizens of other countries, are required to pay property tax at a rate of1%from the market value. This tax is collected annually, but on the condition that the income does not exceed40,000 lariApproximately$17,000.), the taxpayer is exempt from paying taxes on any property. The taxation of land plots in Georgia is also governed by special rules: the rate is0.24 lari(or0.08 dollars) annually for each square meter of non-agricultural land. It is important to note that foreigners cannot own agricultural land.

Dominica

In Dominica, there is no property tax at all, which makes this country particularly attractive to investors and those looking to purchase real estate. This is one of the key factors contributing to the dynamic development of the real estate market in this country.

Conclusion

Thus, when choosing a country to purchase real estate, it is important to carefully study the local tax laws to avoid unexpected costs. Understanding taxation in other countries provides a complete picture of potential expenses and helps make a more informed decision. It will also be helpful to review a table that comparatively presents the main property taxes in the aforementioned countries.

If you have questions about each of the points or need more information about the tax system in a particular country, it is advisable to contact professionals or explore additional sources of information.

Municipal taxes in Canfield and Rozo

In the towns of Cane Field and Rozo, residents are required to pay a local tax, which varies but averages around 1.27% of the market value of their property. If owners decide to rent out their property, they must pay an income tax of 1%. Additionally, when transferring property, there may be a need to pay a gift tax, which involves contributing 1% of the assessed value of the transferred property to a special financial fund, which is then subject to a VAT of 15%.

Municipal tax in Israel

In Israel, property owners face a municipal tax known as Arnona. The amount usually depends on the size and location of the property. The average monthly Arnona bill is about $60 (200 shekels). Certain categories of individuals, such as new immigrants, may be eligible for a reduction in this tax.

The Cayman Islands as a tax haven

There are a number of taxes that are not available in the Cayman Islands, including:

• property taxes;
• income tax for individuals and companies;
• capital gains tax;
• VAT;
• payroll taxes.

Dividends, interest, royalties, or services related to high technology are also not taxed here. Additionally, there is no gift tax or capital gains tax in the Cayman Islands. This place can rightly be called a tax haven.

Taxes in Cambodia

As for countries with minimal tax rates, Cambodia has an annual property tax on paper, but its amount is quite insignificant — only 0.01% of the assessed value. For example, if you purchased a property in Cambodia for $200,000, the tax would only be $200. This country also imposes a stamp duty, which is 4% of the property's value.

Taxes on rental properties in Cambodia

Tax on rental income in Cambodia varies depending on the tenant's status. For citizens of the country, the rental tax rate is 10% of the total income, while for foreign tenants, it is higher at 14%. In this context, the gross income of the tenant is considered to be the amount specified in the rental agreement. For example, if a Cambodian citizen earns $500 a month from rent, the tax amount will be $50, which totals $600 a year. A non-resident tenant with the same income will pay $70 a month, amounting to $840 a year.

It is important to note that the specified tax rates apply to the total rental income and may vary depending on the region and time of year, although the main parameters remain unchanged.

Tax regimes for rental and sale of real estate in different countries

In different corners of the world, various tax systems related to the rental and sale of real estate are in place. Let's take a closer look at a few countries to better understand how these systems function.

Cambodia

Let's start with Cambodia. If a citizen of this country decides to rent out an apartment building consisting of five separate apartments, each of which is rented for800 US dollarsIf he pays monthly, he will have to pay an annual rental tax. This tax is calculated as follows:

• ($800 * 5 apartments) * 10%

As a result, the owner will have to pay.400 dollars a monthwhat will make up4800 dollars a year.

Qatar

Let's move on to Qatar. In this country, local property owners are completely exempt from paying taxes on their property. However, foreigners who rent out their property are required to pay a certain government fee.

Kuwait

Kuwait also delights property owners with the absence of property taxes. However, it is worth noting that rental income is subject to income tax at a fixed rate, which is10%For example, if you are renting out an apartment for$1,000 a month.then your annual income will be12,000 dollars($1000 * 12 months), and accordingly, you will be required to pay a tax of1200 dollars($12,000 * 10%).

Liechtenstein

Liechtenstein follows a similar practice by not imposing property taxes.

Property taxes in different countries

In areas where the transfer of property rights takes place, a fee of 3% of the value of the land plot or transferred assets is established. This amount is directed to the Ministry of Housing Construction. Additionally, tenants are required to pay a municipal tax of 3% of the rental value.

The Turks and Caicos Islands are located in the central part of America, in the Atlantic Ocean, near the Bahamas and Miami. These islands have no taxes on property, personal and corporate income, as well as on capital gains and inheritance.

Cook Islands

As far as Cook is concerned, the archipelago is a sovereign possession of New Zealand, consisting of 15 islands and atolls. These islands also have no property taxes, wealth tax and capital gains tax. However, prospective buyers should be aware that the process of purchasing real estate in the Cook Islands may require additional conditions to be met.

United Arab Emirates

In the United Arab Emirates, property owners are also exempt from federal government taxes. However, in some cases, tenants and owners are required to pay local fees.

• For example, in Dubai, there is a municipal property tax that is 2.5% of the annual rental value of commercial properties and 5% for residential properties.
• Typically, property taxes on commercial real estate are paid by the owners, while tenants bear the costs for their residential spaces.

Since June 2023, a new regulation has been introduced in Dubai.corporate taxat a rate of 9%, which applies to all income exceeding 375,000 AED. This tax affects all holders of trade licenses and companies operating in the city's economy, except for those operating in free economic zones.

Saudi Arabia

In Saudi Arabia, there are also no property taxes. However, there is a tax on undeveloped land. Owners of land parcels that are vacant, inactive, or undeveloped and located in urban areas designated for residential or commercial use are required to pay 2.5% annually on the value of the land.market value of land.

• There is also a tax on real estate transactions, which is 5% of the total amount of sales of properties.
• This tax applies to all types of real estate, regardless of their condition or purpose at the time of sale.

Seychelles

Residents of the Seychelles also enjoy benefits when it comes to property tax payments. This makes the region particularly attractive for investment activities and for individuals seeking to protect their assets. Such tax conditions contribute to the prosperity of the real estate market and the influx of foreign investments into the region.

Thus, the absence of a tax burdenbecomes a significant advantage for both entrepreneurs and private investors, creating a more attractive business environment in these countries.

Property taxes in the Seychelles

In the Seychelles, taxation for foreignreal estate investors is quite favorable. A rate of 0.25% of the market price applies to non-residents for residential properties, specifically apartments, villas, and condominiums.

At the same time, local citizens must pay stamp duty, which is 5% of the amount of the sale of real estate. In the case of non-residents who do not have Seychelles citizenship, the stamp duty for them varies from 11% to 17.5%.

In addition, it is necessary to consider the notary fee, which is set at around 2%. For individual non-residents receiving rental income, the tax rate is fixed at 15%.

Taxation in Thailand

Now let's turn to Thailand. Since 2020, an annual tax on residential property ownership has been implemented in the country. However, for foreigners owning condominiums, the tax burden remains low.

Homeowners are required to pay 0.03% of the agreed transaction price, but this condition only applies to properties valued at over 10 million baht, which is approximately 274 thousand dollars.

In addition, there is the need to pay a commission when buying real estate.

• The transfer tax is 2% of the assessed value.
• Usually, it should be paid by the seller, or they split the amount depending on their agreements.

For detailed information on tax rates, we recommend consulting specialized sources. For non-residents earning rental income, a fixed tax rate of 15% is applied.

Faroe Islands

As for the Faroe Islands, there are specific rules in place. Tax residents may be subject to tax on income earned from renting out property located outside the Islands.

Non-residents, on the other hand, do not pay property taxes but are required to pay income tax on rental income. Additionally, even if income from foreign rentals is not subject to taxation, individuals must include this information in their tax returns in order to be eligible for tax deductions.

The situation in Fiji

Fiji, located between New Zealand and Hawaii, does not have a single national property tax. However, local authorities can impose their own tax levies at the municipal level.

Therefore, it is extremely important to take into account the specifics of tax legislation in each particular region.

Croatia: taxation of resort properties

In Croatian resorts, taxation only affects property owners, who must pay between 5 to 15 kunas (€0.7—2.0) per square meter, with rates varying depending on the municipality or city where the property is located.

Thus, tax liabilities can vary significantly from country to country and region to region, and each situation must be carefully analyzed, especially when it comes to real estate abroad.

Conclusion

In concluding our article on property taxes in various countries, I want to emphasize that understanding the tax system is key to successful real estate investments abroad.

We have looked at a number of countries, such as Bahrain, Georgia, and the Cayman Islands, where property tax is virtually non-existent or minimal. This opens up many opportunities for investors to acquire residential or commercial properties without additional financial burdens.

However, as I mentioned, before making a decision to purchase real estate, it is important to consider other potential tax obligations, such as stamp duty, which can vary significantly depending on the country and the value of the property.

• In Cambodiastamp duty is 4%.
• In BahrainIt's 2% with the possibility of a reduction.

In addition to the possibility of not having a property tax, there are many factors to consider when choosing a country for investment. These include legal stability, the simplicity of registration procedures, and currency exchange rates. In this context, I urge you to carefully analyze not only the tax aspects but also the overall state of the economy of the chosen country, as well as the growth prospects of its real estate market.

Recommendations for investors

• Consider countries where property tax is not levied.
• Consult with tax professionals.
• Study the economic stability and tax orientation of the country.

So, if you are looking for countries to invest in real estate, considering those where property tax is not levied can be a great starting point. But remember: when it comes to finances, it's always better to consult with professionals who can help you navigate all the details and nuances to avoid unexpected expenses.

Ultimately, knowledge is power, and a savvy approach to taxation can be an important step towards your financial success.