Tax on renting out your home on Curacao
WHAT TAX DO YOU PAY WHEN RENTING YOUR PROPERTY IN CURAÇAO
Renting out a house is fine on Curaçao. There is a high demand for long- and short-term housing. Of course you also want to know whether you owe tax on the rental income. The answer is not an unequivocal yes or no, but it depends on the situation.
TAX ON RENTAL INCOME OR NO TAX
If you rent out the house to a resident of the island for a period of at least twelve months and for permanent residence, you do not owe any tax. If the situation is the same, but your tenant does not have a sedula, you will have to pay tax on the rental income. This is also the case when you rent out an apartment or house for the short term – or holiday rental – and when it comes to commercial (rental) rent.
If you want to rent out your second home, for example to holidaymakers, you must
income tax, but only on 65% of the rental income actually received. You will therefore receive a notional cost deduction of 35%. The rates for the year 2019 are as follows:
TAXABLE INCOME IN ANG RATE IN %
0 – 30.643 9,75
30.643 – 40.858 15,00
40.858 – 61.287 23,00
61.287 – 86.823 30,00
86.823 – 127.681 37,50
127.681 – > 46,50
Suppose you receive an annual amount of ANG 60,000 in rental income from your Curaçao home. Then an amount of ANG. 39,000.00 (65%) taxed. On balance you pay ANG 4,242.00 in Curaçao tax.
Sales tax ( VAT)
Since 1 January 2016, turnover tax has to be paid on the income from rental. In principle, the percentage is 7%. In certain cases that is 6%; this is assessed on a case-by-case basis. The tax must be paid to the Recipient of Curaçao no later than the 14th of the following month. Before 2016 this was called tourist tax.
Worldwide income (for Dutch residents)
As a resident of the Netherlands, you owe tax in the Netherlands on your worldwide income. Your second home on Curaçao is part of your worldwide income. This second home is part of your Box 3 income. However, Curaçao also levies tax on this property. After all, the house is located on Curaçao.
Because the Netherlands and Curaçao have mutually agreed that the taxing right belongs to Curaçao, you ultimately pay income tax in Curaçao and not in the Netherlands.
If you officially live in another country, ask a local tax specialist what your obligations are.
International Fine Living does its best to inform people who buy a house on 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. A special warning for all English text; the official language spoken on Curaçao is Dutch and Papiamento, please take into account that translation errors to English might occur.
Categorieën: Curaçao, News, Real Estate Curaçao
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