Last updated September 12th, 2021.

You could make an argument that property owners don’t actually own their house or the land it sits on.

After all, what happens if you stop paying property tax to the government? They’ll come seize your home and put you in jail.

Real estate taxes are essentially a form of mandatory rent, forced on homeowners. While taxes might cost less than paying 12 months of rent, both are a bill that you must pay in order to merely have shelter.

Paying mandatory fees every year isn’t much different from a lease. The only major change is the government taking on the role of “collector” instead of the landlord.

Thankfully, there are still several places left in the world without annual property tax at all. Zero.

You might have to pay a transfer fee when you initially buy real estate in these countries. But there aren’t any annual, ongoing tax obligations.

Most nations without property taxes are located in Asia. Here’s a list including three of them, plus a few others with a very low “near 0%” rate.

 

1. Thailand

Not long ago, Thailand was the only place in Southeast Asia with truly no annual property tax at all.

Back in 2019, the government introduced annual property tax. Yet taxes on condos (foreigners can only own condo units in Thailand on a freehold basis) remain extremely minimal – low enough that we’re keeping the country on this list. 

For example, you’ll pay about 2,000 baht ($60) per year on a condo worth 20 million baht ($600,000).

You also must pay a fee upon first purchasing a property. Transfer tax is 2% of appraised value. Typically, the seller usually pays that entire amount – or at the very least half of it, subject to negotiations.

Besides this one-time transfer payment, you can own a condo in Thailand with absolutely zero obligation to the local tax authorities. That is, unless you either begin renting out or sell the property.

While foreigners can directly own freehold condominium units in Thailand, they’re banned from purchasing land or houses. Thus, you will have to pay a yearly management fee due to the co-owned nature of a condominium building.

Of course, management fees aren’t really the same as a property taxes since that money goes toward keeping your asset in good condition. Having access to facilities like a pool, garden, and gym certainly helps.

 

2. United Arab Emirates

Moving away from Southeast Asia and toward the Middle East, the United Arab Emirates (and particularly Dubai) ranks among the world’s best tax havens. Not just for property owners but with regards to practically everything else too.

The UAE is famous in the global expat community as one of few countries without personal income tax. Notably, the 0% tax rate extends to all rental income on properties in Dubai.

 

Dubai’s economy isn’t in the greatest shape right now. However, property prices are cheap (about US$6,000 per sqm) considering the UAE is a highly developed nation. Real estate taxes are amazingly low here as well.

 

Additionally, residents of the United Arab Emirates aren’t liable to pay capital gains, inheritance tax, stamp duty, or property taxes among several other types of levies.

The situation gets far more complicated if you are not living in the UAE full-time while earning income here though.

UAE’s property taxes can also change based on the specific emirate you’re in. Generally speaking, you’ll find less favorable tax treatment in Abu Dhabi and elsewhere compared to Dubai.

 

3. Cambodia

Cambodia technically does have annual property tax. It’s a rather miniscule 0.01% of the total appraised value.

To give an example, the owner of a house in Cambodia worth US$100,000 owes just US$100 per year worth of real estate tax.

But things aren’t always as they seem in frontier markets. The government hardly ever bothers collecting this tax in practice. Perhaps because it’s such an insignificant amount.

You could get a call from somebody if you own an expensive apartment in Phnom Penh or a piece of prime land. However, a clear majority of Cambodian property owners do not pay any tax.

Don’t get it wrong. We’re not suggesting you shouldn’t pay tax if you buy property in Cambodia – only stating reality.

Enforcement in many frontier markets, including Cambodia, is often lax. If you asked every single property owner in the nation, I doubt over 5% could honestly tell you they pay annual taxes.

 

Countries With (Almost) Zero Property Tax

We might have missed a few smaller jurisdictions. Just about every other country in Asia, besides those mentioned above, does have property tax beyond a hundred dollars or so. And they strictly enforce the law.

Yet some jurisdictions do enjoy incredibly low tax rates. They might cost a bit more than $60 annually (or better yet: nothing) like the aforementioned countries.

A few places are nonetheless still worth mentioning even if they don’t exactly fit into a “zero tax” category.

Malaysia is one example. You must pay two different annual fees (property assessment and quit rent tax), although rates on both of them are miniscule.

The precise amount of taxes you’ll pay in Malaysia depends on location, type, and size of your property. But even large homes aren’t usually subject to more than a few hundred dollars annually.

South Korea is another dynamic market where you hardly pay real estate taxes. Homeowners fall into one of four tax brackets depending on their property’s appraised value. A majority pay well under US$1,000 per year.

 

Real estate taxes in South Korea today compared to a planned rate hike in 2019. 

 

Korea did increase its property taxes in 2019. The rate hike only truly impacts the luxury home market though.

For example, owners of homes worth under KRW1.2 billion (~US$1 million) pay a flat tax of just KRW800,000 (~US$700) annually.

That concludes our list of places to buy property if you don’t like taxes. We all know the famous quote by Benjamin Franklin about “death and taxes”.

He clearly never went to Dubai, South Korea, or Thailand.

 

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an international stock trader and property investor based in Thailand, Cambodia, and several other places. Reid manages the world's first and only frontier market real estate fund and has been featured in publications such as Forbes, Property Report, the South China Morning Post, and Seeking Alpha. You can download his free investment guide by clicking here.

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