Cabo Verde Rental Income Guide 2026

Overview — Rental Income Tax in Cabo Verde

Rental income from letting or leasing of immovable property (land and buildings) is chargeable to tax in Cabo Verde. For individuals letting residential or commercial property, rental income is included in the annual IRS return and taxed at progressive rates. Landlords may claim deductions for expenses incurred in generating rental income. Companies receiving rental income are taxed at the standard IRC rate (22% or 17% for qualifying tourism/SMEs). Withholding tax at 15% applies to rental payments made to non-resident landlords. Given Cabo Verde's significant tourism sector, short-term holiday letting is common and fully taxable.

Taxation of Rental Income — Individuals

For individual landlords, rental income is subject to tax as follows:

• Simplified regime — 70% of gross rent is taxable (30% fixed deduction for expenses), included in IRS assessment
• Actual regime — net rental income after actual expenses is taxable, requiring proper books and records

The 30% fixed deduction in the simplified regime covers general maintenance, insurance, and management costs without requiring individual receipts. Landlords may opt for the actual regime if their actual expenses exceed 30% of gross rent. The net rental income is added to other income and taxed at the progressive IRS rates (0–27.5%). The simplified regime is generally easier for small landlords with limited administrative capacity.

Allowable Deductions — Actual Regime

Landlords who elect for the actual expense regime may deduct the following expenses:

• Repairs & maintenance — not capital improvements
• Property management fees — paid to licensed agents
• Insurance premiums — building and fire insurance
• Mortgage interest — interest on loans used to acquire or improve the property
• IMI — annual municipal property tax paid
• Utilities — if paid by landlord and not recharged to tenant
• Depreciation — of the building (not land)

To claim actual deductions, the landlord must maintain proper accounting records and file detailed schedules with the annual tax return.

Short-Term & Holiday Lettings

Short-term letting through platforms like Airbnb, Booking.com, and holiday rental agencies is subject to the same tax rules as long-term letting. Income from short-term lets is taxable rental income. Platform operators may have reporting obligations to DNRE. Landlords engaged in frequent short-term letting may be considered to be carrying on a business activity, with implications for IVA registration and business tax obligations. The tourism sector is a major part of Cabo Verde's economy, and holiday letting is common across all islands, particularly Sal, Boa Vista, and Santiago.

FAQs

Do I need to charge IVA on rental income?

Residential rent is generally exempt from IVA. Commercial property rent may be subject to IVA if the landlord is an IVA-registered business. Short-term holiday accommodation is subject to IVA at 15% if the landlord exceeds the registration threshold.

What if I rent my property through an agency?

The rental income is still taxable in your name. The agency may provide you with an annual statement of rent collected and any tax withheld. You remain responsible for declaring the income in your tax return.

Are advance rent payments taxable in one year?

Rental income is generally taxable in the year it is received, regardless of the period it covers. If you receive multiple years' rent in a single payment, the full amount is taxable in that year under the simplified regime.

Disclaimer

This guide provides general information about Cabo Verdean rental income tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Cabo Verdean tax advisor or the Direção Nacional de Receitas do Estado for advice specific to your situation. InvestmentKit does not provide tax advice.