Tax on property income in Venezuela
October 12, 2016
Effective Tax Rate on Rental Income
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Nonresidents are taxed only on their Venezuelan-sourced income. Married couples are required to file joint income tax return but the wives can opt for separate taxation on employment or professional income.
The tax administration is the Servicio Nacional Integrado de Administración Aduanera y Tributaria (SENIAT).
INCOME TAX (Impuesto Sobre la Renta)
Taxable income includes: (1) business income, (2) employment income, (3) capital gains, (4) investment income, and (5) other income.
Income earned by nonresidents is taxed at a flat rate of 34%.
Nonresidents earning income from leasing real estate properties are taxed at 34%. The taxable income is computed by deducting actually incurred costs from the gross income. Allowable deductions are administrative expenses (maximum of 10% of gross income), repairs and maintenance, insurance, real estate tax, and municipal tax. Cost-of-purchase depreciation (capital allowance) is not deductible.
Capital gains earned by nonresidents from selling Venezuelan real property are taxed at a flat rate of 34%. The taxable gain is computed by deducting the costs (acquisition costs, improvement costs, and registration duties) from the gross selling price.
VALUE ADDED TAX (VAT)
In Venezuela, the value added tax on renting property will only be paid when the lease is intended for nonresidential purposes. The collection must be made by the landlord
FINANCIAL TRANSACTIONS TAX
Financial transaction tax is levied at 1.5%.
Land Registry or Real Estate Tax (Impuestos a los Inmuebles Urbanos)
Real estate tax is a local tax levied on the real estate property. Each municipality sets its own calculation measures for the tax base and the tax rate. The property owner is responsible for paying the real estate taxes.
Historically, the value of the property, its productivity or the effective income derived from it was considered as the tax base. The actual tax base applicable depends on the municipality.