Last updated June 25th, 2019.

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

Most countries 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

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 first purchasing a property. Transfer tax is 2% of 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 absolutely no obligation to the local tax authorities. Unless you either start renting out or sell the property, that is.

Foreigners can directly own freehold condominium units in Thailand, yet they are banned from purchasing land or houses. Thus, you will have to pay a yearly management fee due to the co-owned nature of a condo 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 toward the Middle East, the United Arab Emirates – and especially Dubai – is one of the world’s best tax havens. Not just for property owners but with regards to practically everything else too.

The UAE is famous among the expat community as one of very few countries without personal income tax. Notably, the 0% tax rate extends to all rental income as well.

 

Dubai’s economy isn’t in the greatest shape. However, property is cheap considering it’s a highly developed nation. And real estate taxes are amazingly low.

 

In addition, residents aren’t liable to pay capital gains, inheritance tax, stamp duty, or property taxes among several others. Everything gets more complicated if you are not living 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.

 

3. Cambodia

Cambodia technically does have annual property tax. It’s a rather 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 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 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 taxes.

 

Countries With (Almost) Zero Property Tax

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

Yet some nations do enjoy incredibly low tax 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 of taxes 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 did increase its property taxes in 2019. The rate hike only truly impacts the luxury home market though.

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 or Korea.

 

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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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