Property Tax in North Korea

Property taxation in North Korea is minimal. All land is state-owned, and individuals hold use rights rather than full ownership. An annual property tax of approximately 0.1% applies to residential properties.

Land Ownership

In North Korea, all land is owned by the state. Individuals and enterprises hold use rights granted by the state. There is no private ownership of land. Property transactions involve the transfer of use rights rather than fee simple ownership.

Annual Property Tax

An annual property tax is levied on residential properties:

• Rate: Approximately 0.1% of assessed property value
• Assessment: Based on state valuation of the property
• Exemptions: State-owned and government buildings

Property Acquisition

When acquiring use rights to property, the following costs may apply:

• Registration Fee: Nominal administrative fee for transfer of use rights
• State Approval: Required for foreign investors acquiring property use rights

Property Disposal

Capital Gains on Property

Gains from the sale of property use rights may be taxed as ordinary income:

• Individuals: Gain taxed at progressive PIT rates (0-20%)
• Foreign Enterprises: Gain taxed at CIT rate (25%)

Rental Income Taxation

Rental income from property is taxable as follows:

• Individuals: Net rental income taxed at progressive PIT rates (0-20%)
• Corporations: Included in business income, taxed at 25% for foreign enterprises

Tax Planning for Property Investors

• Due Diligence: Verify land use rights and state approvals
• Foreign Investment Zones: Special economic zones may offer preferential treatment
• Joint Ventures: Partnering with a DPRK entity may simplify property acquisition