Afghanistan Rental Income Guide 2026

Overview — Rental Income Tax in Afghanistan

Rental income from Afghan property is treated as ordinary income and subject to the standard progressive IIT rates (10–20%) for individuals or the CIT rate (20%) for corporate landlords. There is no separate or preferential rate for rental income. The landlord declares the gross rental income in their annual tax return, deducts allowable expenses, and is taxed on the net rental profit. Unlike many countries, Afghanistan does not impose a withholding tax on rent at source at a fixed rate. However, the tenant may be required to withhold tax if the tenant is a registered business entity. The tax treatment depends on whether the rental activity is considered passive investment or active business.

Tax Rates — IIT Progressive (10–20%)

For individual landlords, net rental income (gross rent minus allowable expenses) is added to all other income and taxed under the progressive IIT brackets:

• 0% — on the first AFN 60,000 per year (tax-free threshold)
• 10% — on income from AFN 60,001 to AFN 200,000
• 15% — on income from AFN 200,001 to AFN 500,000
• 20% — on income above AFN 500,001

For corporate landlords and property companies, rental income is taxed at the flat CIT rate of 20%. The effective tax rate on rental income depends on the landlord's overall income level and available deductions.

Allowable Deductions

Landlords may deduct the following expenses from gross rental income to arrive at net taxable rental profit:

• Repairs & maintenance — not capital improvements
• Property management fees — paid to licensed agents
• Insurance premiums — building and fire insurance
• Annual land tax — paid to municipal or provincial authorities
• Utilities — if paid by the landlord (water, electricity, gas)
• Security services — costs of guarding the property
• Depreciation — capital allowance on the building at prescribed rates

Capital improvements (e.g., building an extension) are not deductible in the year incurred but may be added to the cost base for capital allowances. Landlords must maintain proper records of all income and expenses to support their tax filings.

Vacant Property & Short-Term Letting

Rental income is only taxable when the property is actually let. There is no deemed rental income for vacant or owner-occupied properties. However, the annual land tax continues to apply regardless of occupancy. If a property is let for only part of the year, the rental income for that period is subject to tax. Expenses incurred during vacant periods (e.g., security, maintenance) may be deducted. Short-term letting (e.g., guest houses, holiday rentals) is also subject to rental income tax — the net income from such activities is reported and taxed at the landlord's marginal rate.

FAQs

Who is responsible for paying tax on rental income?

The landlord (property owner) is responsible for declaring rental income and paying tax. If the tenant is a registered business, they may be required to withhold tax from rent payments and remit it to ARD as an advance payment.

What if I rent my property through an agency?

If the agency manages the property on your behalf, they may handle tax withholding and remittance. You should still declare the net rental income in your annual tax return and obtain a withholding tax certificate from the agency.

Are advance rent payments taxable in one year?

Yes, rental income is generally taxable in the year it is received, regardless of the period it covers. If you receive multiple years' rent in advance, the full amount may be taxable in the year of receipt.

Disclaimer

This guide provides general information about Afghan rental income tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Afghan tax advisor or the Afghanistan Revenue Department for advice specific to your situation. InvestmentKit does not provide tax advice.