Property Tax in Marshall Islands

Property taxation in the Marshall Islands is relatively light, with modest registration fees on acquisition and low annual property taxes.

Property Acquisition Taxes

Registration Fees

When purchasing property in the Marshall Islands, buyers are required to pay registration fees. These are calculated on the purchase price or market value.

• Standard Rate: Approximately 2% of property value
• First-time Buyers: Reduced rate may apply for qualifying purchasers

Notary Fees

Notary fees for property transactions are typically 0.5–1% of the purchase price and are negotiable between buyer and seller.

Annual Property Taxes

Property Tax

An annual property tax is levied on real estate:

• Rate: Approximately 0.5% of assessed property value
• Exemptions: Government buildings, religious buildings, and charitable organizations

Municipal Taxes

Municipalities may levy additional taxes for local services. These vary by location and are generally modest.

Property Disposal Taxes

Capital Gains on Property

Gains from the sale of property are subject to tax as ordinary income:

• Individuals: Taxed at progressive PIT rates (0–12%)
• Corporations: Taxed at 22% CIT (or minimum 3% of gross revenue)
• Primary Residence: Potential exemption under certain conditions

Rental Income Taxation

Rental income from property is taxable as follows:

• Individuals: Net rental income taxed at progressive PIT rates (0–12%)
• Corporations: Included in business income, taxed at 22%
• Non-Residents: 0% withholding tax on gross rental income

Tax Planning for Property Investors

• Hold Property Through a Company: May provide tax advantages
• Depreciation Deduction: Buildings can be depreciated for tax purposes
• Mortgage Interest Deduction: Interest on property loans is deductible against rental income
• Joint Ownership: Consider ownership structure to optimize tax outcomes