You could easily make an argument that people don’t really own their house or the land it sits on.

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

Paying mandatory fees every year isn’t much different from a lease. The only two changes are the payment schedule and the government taking the role of landlord.

Thankfully, there are a few places left in the world without annual property tax at all. You might still have to pay a transfer fee when you first buy real estate in these countries. But there are no other tax obligations.

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

 

Thailand

Starting off our list, Thailand is the only country in Southeast Asia with truly no annual property tax.

You still must pay a fee upon buying a property. Transfer tax is 2% of its appraised value, although the seller usually pays that entire amount – or at the very least half of it.

Besides this one-time payment you can own a condo in Thailand with zero obligations to the local tax authorities. Unless you either sell or start renting out the property, that is.

Foreigners can directly own condominium units in Thailand, yet they’re banned from buying land or houses. So, you’ll have to pay a yearly management fee due to the nature of condo buildings.

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

 

United Arab Emirates

Moving toward the Middle East, the United Arab Emirates – and especially Dubai – is one of the best tax havens in the world. Not just for real estate buyers but with regards to practically everything else too.

The UAE is famous in the expat community as one of few nations on the planet without any personal income tax. Of course, the 0% rate extends to all rental income as well.

 

Dubai’s economy isn’t in the greatest shape. However, property is cheap and taxes are amazingly low.

 

In addition, residents aren’t liable to pay capital gains, inheritance tax, stamp duty, or property taxes among several others. Things get more complicated if you don’t live in the UAE while earning income here though.

UAE taxes can also change based on the emirate. You’ll generally find less favorable treatment in Abu Dhabi and elsewhere compared to Dubai.

 

Cambodia

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

For 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 appear in frontier markets. The government hardly ever bothers collecting this tax in practice. Perhaps because it’s such an insignificant amount.

You might get a call from somebody if you own an expensive apartment in Phnom Penh or some prime land. However, a clear majority of Cambodian property owners don’t pay any tax.

Don’t get me wrong. I’m not suggesting you shouldn’t pay tax if you buy property in Cambodia – only stating reality. If you asked every single property owner in the country, I doubt over 5% could honestly tell you they pay annual tax.

 

Countries With Almost No Property Tax

Every other country in Asia besides those listed above does have property tax and strictly enforces the law.

Yet some places boast incredibly low rates. Low enough to where they may as well not collect taxes at all. They’re still worth mentioning even if not fitting into a “zero tax” category.

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

The exact amount you’ll pay in Malaysia depends on location, type, and size. 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 does have plans to eventually raise property taxes later in 2019. The rate hike will only impact the luxury market though.

Owners of homes valued below KRW1.2 billion (~US$1 million) will pay a flat fee of just KRW800,000 (~US$700) annually.

That concludes our list of places to buy property if you don’t like tax. We all know the famous quote by Benjamin Franklin about “death and taxes”. He clearly never went to Dubai or Korea.

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an accomplished stock trader and property investor in Thailand, Cambodia, and many other places. He's been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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