Lebanon Rental Income Guide 2026
Rental income in Lebanon is taxed under a favorable deemed rate system: 4–8% of gross rent is treated as taxable income, or landlords may elect taxation at progressive IIT rates.
Deemed Rate System (Default)
By default, rental income is taxed on a deemed basis. Only a percentage of gross rent is treated as taxable:
- Residential property: 4% of gross rent is deemed taxable
- Commercial property: 8% of gross rent is deemed taxable
This means the effective tax rate on rental income is extremely low: for a residential property, the effective tax rate on gross rent is approximately 0.08–1.0% depending on the IIT bracket applied to the deemed amount.
Alternative: Actual IIT Rates
Landlords may elect to be taxed under the standard progressive IIT rates (2–25%) on actual net rental income (gross rent minus expenses). This may be beneficial for properties with high deductible costs or losses.
USD-Based Leases
Most rental contracts in Lebanon are denominated in USD. Rental income received in USD is taxable and must be converted to LBP at the applicable exchange rate for filing purposes.
Withholding Tax on Rent
Tenants (especially corporate tenants) may be required to withhold tax on rent payments and remit it to the tax authorities. The withholding rate depends on the landlord's tax status and the nature of the lease.