Countries without real estate tax: a complete overview

Real estate tax is levied by the authorities of most countries of the world annually or semi—annually – its rate depends on the total value of your property. But there are also those among these states where there is no such tax. In this text, we provide a complete list of countries where the real estate tax for residents and non-residents is absent or has a symbolic character.

It is important to point out that before buying a house in a country where there is no real estate tax, you should pay attention to stamp duty — this is another type of tax that the government usually levies on the purchase of an object. However, the good news is that this fee is usually a one-time payment. 

Europe

Georgia

Property tax in Georgia is paid by individuals (both residents and non—residents) – this is stated in Articles 201, 202 of the Tax Code of this country. The tax rate is 1% of the market value of the property. This fee must be paid annually. 

If the annual income is less than 40,000 lari (about 17,000 dollars), then an individual is exempt from tax on any property in Georgia.

Land is taxed at a different rate — 0.24 lari (0.08 USD) per year as property tax for any 1 sq.m. m of non-agricultural land. At the same time, foreigners are not allowed to own agricultural land in Georgia. 

Croatia

In Croatia, the real estate tax was abolished in 2017 after a campaign organized by the Lipa Taxpayers Association.

The owners of the resort housing pay 5-15 kuna (€0.7–2.0) per square meter, depending on the municipality or city in which the property is located.

The property purchase tax in Croatia, also known as the property transfer tax, is set at 3% of the market value at the time of acquisition. This is relevant for both citizens of the country and foreigners.

As for the tax on rental income, the rate is 12% for both residents and non-residents. For income from renting out real estate for non-tourist purposes, if the income is less than 40,000 euros per year, effective tax rates range from 7% to 8.2%. When renting real estate for tourist purposes by Croatian tax residents, there is a preferential lump-sum tax, the exact amount of which is determined by the local municipality.

Liechtenstein

There is no real estate tax in Liechtenstein. However, it is important to keep in mind that capital gains tax may be levied on the sale of real estate (this is relevant for both individuals and companies), and its rate can reach 24%. Capital gains tax may also be applied when selling a controlling stake in a real estate company.

Rental income in Liechtenstein is subject to income tax. At the same time, the rates of this tax are progressive and range from a minimum of 3.24% to a maximum of 17.01%. In addition, there is a communal tax, which is a surcharge on the national income tax due, with communities charging a surcharge of 150% to 180%.

Monaco

There are no real estate taxes in Monaco. In the case of renting out an object, income tax is usually 1% of the amount received for the year, but usually this tax is paid by the tenant.

If you manage your property, you will also have to be responsible for paying income tax. Any profit from the sale of real estate is taxed at the rate of 33.3%.

Malta

There is no real estate tax in Malta, however, when transferring real estate, withholding tax is charged at a rate that varies from 5% to 12%. 

When transferring real estate in Malta, a stamp duty of 5% is also applied for both residents and non-residents. On the island of Gozo, a preferential rate of 2% is provided.

Separately, it should be mentioned that the ownership of real estate in Malta is not taxed. However, if you rent out your property, a fee of 15% of the income received will be charged.

Faroe Islands

If you are a full-fledged tax resident of the Faroe Islands, the government has the right to impose a tax on any income received from renting real estate located outside the country.

Although there are no real estate taxes on the islands, non-resident individuals They are obliged to pay tax when they receive income from renting their property. Plus, even if income from renting real estate abroad is not taxed, people must include this information in their tax returns in order to receive tax deductions.

Middle East and Asia

United Arab Emirates (UAE)

Real estate in the UAE is not taxed at the national level. However, in certain cases, tenants and property owners are responsible for paying their individual fees. For example, Dubai currently has a municipal property tax, which is 2.5% of the rental price of commercial real estate per year and 5% for residential real estate. Usually, the owners pay the tax on commercial real estate, and the tenants pay for residential real estate.

It should be noted that in June 2023, Dubai introduced a corporate tax of 9% on income exceeding 375 thousand AED. The tax applies to all enterprises and persons with trade licenses operating in the domestic market of Dubai, with the exception of those located in free economic zones.

Bahrain

In the Kingdom of Bahrain, real estate tax is not levied on the alienation or leasing of land and buildings — this applies to transactions with both residential and commercial properties. There are also no tax obligations for newly built buildings.

However, when registering or transferring real estate in Bahrain, a stamp duty is applied, which is 2% of the cost. This fee can be reduced to 1.7% if it is paid within 60 days after the completion of the transaction.

Qatar

In Qatar, property owners are exempt from property taxes. The state fee is charged only to foreign citizens who rent out their facilities.

Kuwait

There are no real estate taxes in Kuwait. Income received from renting out real estate is subject to income tax at a rate of 10%. 

For example, if you rent a property for $1,000 per month, the annual rental income will be $12,000 ($1,000 * 12 months). Then the annual tax on rental income will be $12 000 * 10% = $1200.

Oman

In Oman, residents and companies are exempt from paying property taxes and stamp duties. However, when transferring property, it is required to pay a commission to the Ministry of Housing in the amount of 3% of the value of the land or transferred property. In addition, a 3% municipal tax is applied when renting out property.

Saudi Arabia

Real estate taxes are not levied in Saudi Arabia. However, there is a white land tax. This tax obliges owners of vacant, unused or undeveloped plots of land in urban areas intended for residential or commercial use to pay 2.5% annual tax on the market value of the land.

There is also a tax on real estate transactions in the country, which is 5% of the total value of the object being sold. This tax applies to real estate regardless of its condition or purpose at the time of sale.

Cambodia

Technically, Cambodia has an annual property tax, but it is small and amounts to only 0.01% of the total assessed value. Suppose you bought a house in Cambodia for $200,000 — then the property tax for you will be $200. In addition, the country charges a stamp duty of 4% of the value of real estate. 

In Cambodia, the tax on rental income varies depending on whether the landlord is a Cambodian citizen or a non-resident. Cambodian citizens are required to pay tax at a rate of 10% of gross rental income, while non-residents are subject to a higher tax rate of 14%. 

Gross rental income is the amount agreed upon in the lease agreement of the leased property. For example, if a Cambodian citizen rents out real estate for $500 per month, the annual rental tax will be 500 * 10% = $50 per month or $600 per year.

For non-residents using the same rental income of $500 per month, the annual rental tax will be $500 * 14% = $70 per month or $840 per year.

It is important to note that these tax rates apply to total rental income. So, for example, if a Cambodian citizen rents out a residential complex of 5 apartments at a price of $800 per unit per month, the annual rental tax will be ($800 * 5 apartments) * 10% = $400 per month, or $4,800 per year.

Thailand

The annual tax on the ownership of residential real estate in Thailand has been introduced since 2020. However, the tax on the ownership of condominiums (foreigners have the right to own them only on property rights) remains very low. You will need to pay 0.03% of the contract value of the property annually, but only if its value exceeds 10 million baht (approximately $274 thousand). 

You will also have to pay a commission when you first purchase a property. The transfer tax is equal to 2% of the assessed value. Usually, the seller pays all or at least half of this amount, depending on the arrangements. Detailed tax rates can be found here.

Non-resident individuals who receive rental income in Thailand are subject to a fixed tax rate of 15%.

Israel

Property owners in Israel pay a municipal fee known as “arnona”. The amount of tax usually depends on the area of the property and its location in the region.

On average, the monthly amount of the municipal fee is about $60 (200 shekels). Some categories of citizens, for example, new repatriates, are given discounts on arnona.

Sri Lanka

There is no property tax in Sri Lanka. Non-residents are required to pay only tax on rental income at a rate of 20%.

Also, when buying a property in Sri Lanka, stamp duty is charged, which ranges from 3% to 4% of the property value.

Caribbean region

Cayman Islands

There is no real estate tax, personal income tax, corporate income tax, capital gains tax, VAT and payroll tax in the Cayman Islands. In addition, there is no withholding tax on dividends, interest, royalties or fees for technical services. The Cayman Islands also does not apply gift tax and equity tax.

Dominica

There is no concept of a real estate tax in Dominica. However, residents of the towns of Canefield and Roseau are required to pay a municipal tax, the rate of which varies and averages 1.27% of the current market value of the property.

If the owners of the property decide to rent out their property, they will have to pay income tax in the amount of 1%. Under certain circumstances, the property transfer tax applies to gifts. It is often required to deposit 1% of the value of the transferred property into the financial security fund, which is also subject to VAT in the amount of 15%.

Turks and Caicos Islands

The Turks and Caicos Islands are located in Central America in the Atlantic Ocean near the Bahamas and Miami. There is no tax not only on property, but also on individual and corporate income, capital gains and inheritance. 

Oceania

Fiji

This state is located on the archipelago of the same name between New Zealand and Hawaii. There are no property taxes at the national level. However, municipalities in different areas can make their own decisions on this issue, so it is necessary to proceed from each specific case.

Cook Islands

The Cook Islands are a sovereign territory of New Zealand, consisting of 15 islands and atolls. There is no real estate tax, wealth tax and capital gains tax. However, it is worth noting that the process of acquiring real estate in the Cook Islands may require some additional efforts.

Africa

Seychelles

Residents of Seychelles are not subject to property tax. And for non-residents, it is 0.25% of the market value of their residential apartments, condominiums and villas.

In Seychelles, the tax on the purchase of real estate, also known as stamp duty, is set at 5% of the sale price for citizens or companies of Seychelles. For citizens who do not live on the islands, the stamp duty can vary from 11% to 17.5%. In addition, notary fees of 2% are usually charged.

As for the tax on rental income, non-resident individuals are taxed at a fixed rate of 15%.

Other taxes and fees related to real estate

Although there may be no annual property tax in these countries, it is important to consider other taxes and fees that may arise when buying, owning or selling real estate:

• Stamp duty: Many countries charge stamp duty when buying real estate. For example, in Malta it is 5%, in Bahrain it is 2%.
• Property transfer tax: In some countries, such as Croatia, a property transfer tax (3% of the market value) is levied on the purchase of real estate.
• Tax on rental income: Even in countries without real estate tax, a tax on rental income may be levied. For example, in Kuwait it is 10%, in Malta it is 15%.
• Capital gains tax: Capital gains tax may be levied on the sale of real estate. In Liechtenstein, for example, it can reach 24%.
• Municipal fees: In some countries, such as the UAE, there may be municipal fees that actually replace the real estate tax.

For convenience, let’s present the most important thing in the form of a comparative table:

* Only if the value of the property exceeds 10 million baht (about $274 thousand). 
** Excluding the municipal tax in the cities of Canefield and Roseau (about 1.27% of the market value). 
*** Some municipalities may impose their own taxes. 
**** If the annual income is less than 40,000 lari (about $17,000), no tax is charged.

Note: This table provides an overview of the taxation of real estate in these countries. Tax rates and rules may change, so it is recommended to consult with local tax specialists before making investment decisions.

Frequently Asked Questions (FAQ): Countries without Real estate Tax

What is a real estate tax?

A property tax is a tax levied on property owners by local governments. It is usually calculated based on the assessed value of the property and is used to finance local services such as schools, roads, police and fire protection.

Are there any countries where there is no real estate tax at all?

Yes, there are several countries where there is no annual property tax. For example, the Cayman Islands, Monaco, the United Arab Emirates, Kuwait and some other countries do not charge this tax.

If there is no real estate tax in the country, does this mean that owning real estate there is completely free?

Not quite. Even in countries without property taxes, there may be other costs associated with owning real estate, such as stamp duties on purchase, taxes on rental income or municipal fees.

Which countries in Europe do not have a property tax?

In Europe, countries without real estate tax or with very low taxes include Monaco, Liechtenstein, Malta and the Faroe Islands. Croatia also abolished this tax in 2017, with the exception of resort properties.

Are there countries in the Middle East without a property tax?

Yes, many countries in the Middle East do not have property taxes, including the UAE, Bahrain, Qatar, Kuwait, Oman and Saudi Arabia.

Does the absence of a real estate tax affect other taxes in the country?

Often, countries without a real estate tax compensate for this with other taxes or fees. For example, the tax on the purchase of real estate or the tax on rental income may be higher.

Can foreigners enjoy the same tax benefits as locals?

It depends on the specific country. In some countries, such as the Seychelles, other taxation rules may apply to non-residents. It is important to study the legislation of a particular country before buying a property.

Is it worth choosing a country to buy real estate just because there is no real estate tax?

The absence of a real estate tax is just one of the factors that should be considered when choosing a country to invest in real estate. It is also important to consider the general economic situation, political stability, quality of life, property laws and other taxes.

Author

Yulia Yanukovych Editor-in-Chief

I am responsible for the work of the editorial office. I write expert interviews and guides.

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