Taxes on renting out a house or apartment in Curaçao
Do you own a house or apartment in Curaçao and want to rent it out? Or are you considering buying a property as a rental investment? This article explains the tax implications of renting out real estate in Curaçao. Would you like to rent out your property successfully? We would be happy to help. Click here for more information.
Income tax on rental property in Curaçao
In Curaçao, individuals pay income tax on income earned from renting out real estate, including houses, apartments, commercial properties, and land. Rental income is added to other income for income tax purposes, such as income from employment, a pension, or a business. Income tax is calculated on your total taxable income. You do not have to report your entire gross rental income. The following sections explain what must and must not be reported.
Taxable rental income from real estate in Curaçao
You may deduct 35% of your rental income as a standard expense allowance when renting out a property such as a house. This allowance is intended to cover expenses such as maintenance, insurance, real estate agent fees, and taxes. Anyone may deduct this allowance from their rental income, and receipts are not required. This leaves 65% of the rental income, before applying any additional deductions.
If the rent includes expenses such as water, telephone, electricity, or yard maintenance, you may deduct those expenses from the rental income. The same applies if you rent to vacationers and pay the cleaning costs yourself. You must be able to provide documentation for these expenses. Expenses for maintenance, repairs, insurance, the real estate agent, property tax and ground lease payments may not be deducted from rental income. Only expenses that would normally be paid by a tenant are deductible.
You may also deduct mortgage interest and other interest charges. Loan-related expenses may be deductible as well, but principal repayments are not. Premiums for decreasing-term life insurance—a life insurance policy whose coverage decreases as the mortgage balance declines—are also deductible.
The deductions listed above can only be applied against positive rental income. Your deductions can therefore never exceed the rental income included in your taxable income.
Paying tax on rental property in Curaçao
Tax is calculated on your total taxable income. In addition to the deductions described above, certain tax allowances may also apply. Income tax is charged on taxable income. As with OZB the amount due is determined using tax brackets. For current information about tax rates and other details, please consult the website of the Belastingdienst.
Turnover tax (OB) on residential rentals in Curaçao
In addition to income tax, turnover tax may apply when renting out a home. Normally, only businesses are required to remit turnover tax. However, landlords renting out a house or apartment in Curaçao may also be required to pay turnover tax.
Curaçao has a small-business scheme known as the Regeling Kleine Ondernemers. If your revenue for the previous year was below XCG. 30,000 and you do not expect your revenue for the current year to exceed XCG. 30,000, you may apply to the Belastingdienst for an OB exemption. The Regeling Kleine Ondernemers does NOT provide an exemption for the rental of real estate.
The OB return must be filed every month, before the 15th day of the following month, including when income has been receivedFailure to file a return may result in the Belastingdienst imposing an estimated turnover-tax assessment. Failing to file an OB return, or filing it late, is a violation for which penalties may be imposed.
The Belastingdienst issues personal CRIB numbers for income-tax purposes. A separate business CRIB number is issued for renting out a property in connection with the OB return. To file the OB return, here an account can be created. After activating the account, select a business profile.
Vacation rentals of less than 90 days
If you rent out an apartment, house, or room for less than 90 days, you pay 7% OB.
Short-term rentals of more than 90 days but less than one year
If you rent out a property for more than 90 days but less than one year, you pay 6% OB.
Long-term rentals of at least one year
If you rent out a house or apartment for one year or longer, you pay 0% OB to the Belastingdienst.
Commercial and other rentals
If none of the options above applies to you, or if you rent out a commercial building, office, factory, retail space, storage space, or similar property, you also pay 6% OB
This article provides a concise overview of income tax payable on rental income and applies to residents of Curaçao. If you own many apartments or houses, you may be treated as a business owner for tax purposes rather than as an individual landlord. The turnover-tax rates apply to everyone.
We cannot guarantee that all information is accurate and current. Have you found an error, or has something changed? Please email robin@livinggoed.com. We would be grateful.
Do you have questions about taxes payable when renting out real estate? Please email robin@livinggoed.com.
