Income Tax

Net rental income is taxed in Jordan. A married couple can file either joint or separate tax returns.

Income-generating expenses such as repairs, taxes and fees, management costs, and depreciation are deductible from the gross rent. The depreciation rate is 2% annually but the rate can be doubled for tax purposes.

However, 15% of the net rental income derived from properties located within Amman greater municipality is exempted from tax. The tax-exempt amount for other areas in the Kingdom is 30% of the net rental income.

The annual income tax liability is further subject to social services tax which is levied at 10%.

Real Estate Tax

Real estate taxes paid on rented real estate is treated as tax credit and deducted from the income tax due. The 10% real estate tax is levied on 80% of the annual rental income [(annual rental income x 80%) x 10%].

Zakat

Muslims are liable to pay zakat on their income. The zakat can be deducted from their taxable income up to a maximum of 25% of the taxable income.