Tax

If an individual is a tax resident of one country but has a source of income from another country, complexities can arise. Tax treaties ensure that the same income is not taxed twice. Broadly, tax treaties provide that the country from which the income is generated has the right to tax it.

This is true for Rental Income and thus should be taxed in the country that the income is derived from. As tax laws differ from one country to the next, it’s best to seek professional tax advice in order to understand your liability if any.

Taxes involved when purchasing Property

There are four main taxes involved in any property sale and purchase transactions (the names may differ from country to country):

Capital Gain Tax – Payable by the seller and determined by the gain which is the difference between purchase price and selling price. There may be some exceptions.

VAT – Value added Tax is normally paid by the buyer for new properties prior to the transfer of title deeds.

Transfer Fee – Payable to land registry before transfer of title takes place and usually paid by the purchaser

Stamp Duty – payable to tax office and calculated on the contract value of the property. This is payable at the time of exchanging contracts.