The Real Estate Agency of Curacao tells: Tax on renting out your house on Curacao

Paying Tax on Renting Your House in Curaçao

If you’re considering renting out a property in Curaçao, or if you already own real estate on tour beautiful island, it’s crucial to understand the tax implications. The following article provides valuable insights into the tax obligations you may face when renting out your property in Curaçao.

Income Tax and Real Estate Rentals in Curaçao

As a private property owner residing in Curaçao, you are subject to income tax on the revenue generated from renting out real estate, including homes, apartments, commercial properties, and even land. These rental incomes are combined with any other earnings you may have, such as income from employment, pensions, or business activities, to determine your total taxable income. The applicable income tax is calculated based on this combined income. It’s essential to differentiate which incomes should be reported and which should not.

For non-residents of Curaçao who own property and wish to rent it out, income tax is only payable on the rental income earned in Curaçao. The principle is that “where the property is located” is where taxation applies. To prevent double taxation, the Netherlands and Curaçao have a treaty in place, stipulating that you should only be taxed in one jurisdiction, which is Curaçao in this case. If you are not officially a resident of the Netherlands, it’s advisable to check the tax rules with the country where you are registered regarding renting immovable property abroad.

Taxable Income in Real Estate Rentals in Curaçao

As a landlord, you can deduct 35% of the rental income as expenses. This deduction is intended to cover costs such as maintenance, insurance, real estate agent fees (brokerage fees), and taxes. This applies to everyone, and there is no need to provide evidence of expenditures like receipts. This means that 65% of the rental income constitutes taxable income, but there are other potential deductions.

Deductions for Taxation on Rental of Homes in Curaçao

Suppose your rental rate includes costs like water, telephone, electricity, or garden maintenance, or if you rent your property to vacationers and cover cleaning expenses. In that case, you can also deduct these costs. However, it’s crucial to have supporting documentation to justify these deductions. Costs related to routine maintenance, repairs, insurance, real estate taxes, and leasehold fees cannot be deducted from rental income. Only costs typically borne by a tenant are deductible.

Additionally, you can deduct the (mortgage) interest. You can also deduct loan costs, excluding the repayment portion. Premiums for decreasing term life insurance policies are also deductible.

These deductions are applicable only when you generate a positive return from rental income. You cannot claim more deductions than your actual income.

Income Tax Rates in Curaçao for 2024

The income tax rates for 2024 in Curaçao are as follows:

Taxable Income in ANG Rate in %

0  – 37.168                                   9,75 %
37.168  – 49.558                       15,00 %
49.558  – 74.337                      23,00 %
74.337  – 105.310                    30,00 %
105.310 – 154.867                   37,50 %
154.867  ->                               46,50 %

For instance, if you receive annual rental income of ANG 60,000 from your Curaçao property, ANG 39,000 (65%) is considered taxable. As a result, you would pay ANG 4,242.00 in Curaçao income tax.

For more information about the tax rates provided by the Receiver of Curaçao, please visit their website.

Value Added Tax (VAT) for Short-Term Rentals (Vacation Rentals)

Since January 1, 2016, VAT is applicable to income from vacation rentals, with a standard rate of 7%. In certain cases, a 6% rate may apply; this is determined on a case-by-case basis. The tax should be paid to the Taxoffice of Curaçao by the 14th of the following month. This doesn’t apply if you rent for more than 1 year to the same person. To prove the person’s registration on the island during the rental period, you should keep a copy of their “sedula.”

Worldwide Income (for Dutch Residents)

As previously mentioned, as a Dutch resident, you are subject to taxation in the Netherlands on your worldwide income. Your second property in Curaçao is part of your worldwide income. This second property falls under your Box 3 income in the Netherlands. However, Curaçao also levies tax on this property, as it is situated in Curaçao.

Since the Netherlands and Curaçao have agreed that Curaçao has the taxing authority in this situation, you ultimately pay income tax in Curaçao and not in the Netherlands.

If you officially reside in another country, please consult a local tax expert to understand your obligations. If you are Dutch and need comprehensive advice, contact the tax specialists at “Belastingvoordeel Curaçao!”

This article appeared in the series: The Makelaar van Curacao tells.

International Fine Living does its best to inform people who buy a house in Curaçao or sell a house as well as possible. Unfortunately, our time is also limited and we will not always be able to publish the latest updates. We therefore always recommend that you verify the information provided with the correct agency or company; you cannot derive any rights from the accuracy of the information provided. Attention other real estate agents on Curacao: all our texts are copyrighted. It is therefore not permitted to copy texts or parts thereof. Of course, anyone who wants to can post a link to our blog.

Categorieën: Curaçao Real Estate, News

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