Property tax is a burden to most property buyers. It is the annual money that the owner of a property owes the government based on its value. This tax is not dependent on whether the owner gets returns from the property or their other means of income.
The rate of property tax differs from place to place and is usually collected annually or semi-annually. All taxes collected by the government are used for the country’s development and functioning and their payment is mandatory for everyone residing in that country.
But do not lose hope yet. You can still invest in real estate and escape the trouble of paying taxes for the property. Although, do make sure to learn the taxation rules in the countries with no property tax in detail before committing.
Here is the list of such countries:
No individual income tax is charged in Kuwait but corporate income is taxed at a flat rate of 15%. There is also no withholding tax, capital gains tax, net worth tax, inheritance tax, or gift tax.
No individual income tax, corporate income tax, or capital gains tax is charged in Monaco. Rental properties are taxed at a rate of 1% of the total annual rent along with some extra charges.
There is a 55% corporate income tax for upstream oil and gas activities and 20% for branches of foreign banks. A standard VAT of 5% is charged. There is no individual income tax, capital gains tax, net worth tax, inheritance tax, or gift tax.
No income tax, capital gains tax, inheritance tax, or corporate tax in the Turks and Caicos Islands. The only form of taxation imposed are contributions required for National Insurance (NI) and the National Health Insurance Plan (NHIP).
Income tax, Capital gains tax, net worth tax, inheritance tax, gift tax and payroll taxes are absent in Bahrain.
Employees are expected to make a Social Security Contributions of 4% – 19%. A tax of 10% is charged upon the rental of commercial properties and residential properties when they are rented by expats.
Only a few countries and their basic taxes are mentioned above. Make sure that you know all laws regarding taxes and their rates in the country you want to invest in. Countries with no property taxes most likely charge many other taxes such as duty tax, individual income tax, corporate income tax, withholding tax, capital gains tax, value-added tax, and so on.
Taxation rules in a country are updated every year, so make sure that your research is focused on the most recent sources.
Owning a property can feel very fulfilling, but you might be overwhelmed by the taxes and other expenses that come along with it if you are not aware of them beforehand.