Jordan Rental Income Tax Guide 2026

Rental Income — Taxed as Ordinary IIT

Rental income from residential and commercial property located in Jordan is subject to income tax as ordinary income under the IIT system. The income is added to the landlord's total annual income and taxed at the progressive rates of 5%, 10%, 20%, and 30% after the JOD 6,000 threshold. Unlike some countries, Jordan does not have a separate withholding tax regime for rental income — the landlord is responsible for declaring rental income and paying tax through the annual return.

Allowable Deductions

Landlords may deduct the following expenses from gross rental income:

• Mortgage interest: Interest on loans used to purchase, construct, or improve the rental property
• Repairs and maintenance: Costs of keeping the property in a habitable condition (not capital improvements)
• Insurance premiums: Buildings, contents, and landlord liability insurance
• Property management fees: Fees paid to managing agents
• Municipal property tax: Annual property tax paid to the municipality
• Depreciation: Wear and tear on the building structure and fixtures

Capital improvements (extensions, major renovations) are not immediately deductible but may be claimed through depreciation over time.

Non-Resident Landlords

Non-resident landlords receiving rental income from Jordanian property are subject to the same IIT rules. The rental income is subject to 10% withholding tax at source (final tax for non-residents unless they elect to file a return under the standard IIT regime). Reduced rates may apply under double tax treaties.

Record-Keeping

Landlords must maintain proper records of rental income and expenses, including tenancy agreements, rent receipts, invoices for expenses, mortgage statements, and property tax receipts. Records must be retained for at least 5 years after the tax year.

FAQs

Is rental income subject to GST?

Residential rental income is exempt from GST. Commercial rental income may be subject to GST at 16% if the landlord is a GST-registered person and the annual rental turnover exceeds JOD 75,000.

Can I deduct mortgage principal from rental income?

No, only the interest portion of the mortgage payment is deductible. The principal repayment is a capital payment and is not deductible.

What happens if I do not declare rental income?

Failure to declare rental income may result in additional tax assessments, penalties of up to 100% of the tax evaded, and interest on unpaid amounts.

Disclaimer

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