Guide to Property Taxes in Aruba
Tax Rate on Rental Income |
|||
| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 10% | 30.52% | 40.1% |
Nonresidents are taxed on their income sourced from Aruba. Married couples may be taxed jointly or separately. However, spouses cannot opt for joint taxation on their incomes from employment, business, and freelance work.
Income Tax
Aruba has a progressive income tax system. Foreign residents are subject to tax on their Aruban-sourced income. Income up to AWG 30,000 is tax-free.
Tax Rates for Nonresidents
| Taxable Income (AWG/US$) | Tax Rate |
| Up to 34,930 (US$19,379) | 10.00% |
| 34,930 - 63,904 (US$35,454) | 21.00% |
| 63,904 - 135,527 (US$75,191) | 42.00% |
| 135,527 and more (US$75,190) | 52.00% |
Rental Income Tax
Income derived by individuals from leasing immovable property is taxed at normal progressive rates. Taxable income is gross rental income less maintenance costs, land tax, insurance premiums, and interest on mortgage payments.
Income from immovable property includes not only rent and lease payments, but also income from second houses, which are not rented out.
Capital Gains Tax
Capital gains realized from selling real estate property, excluding the taxpayer's principal residence, are taxed at the progressive income tax rates.
Capital gains realized on real properties considered business assets are taxed at progressive rates only if the gains qualify as income from independently performed activities.
Corporate Taxation
Corporate income tax is levied on business or trading income, as well as passive income (dividends, interest, and capital gains). Income and capital gains earned by companies are taxed at the flat corporate tax rate of 22%. Income-generating expenses are deductible when calculating taxable income.
Property Buying and Selling Costs
| Transaction Costs | Rate | Who Pays |
| Property Transfer Tax | 3.00% - 6.00% | Buyer |
| Notary Fees | 1.00% - 4.00% | Buyer |
| Legal Fees | 1.00% - 2.00% | Buyer |
| Real Estate Agent Fee | 2.00% - 3.00% | Seller |
| Costs Paid by buyer | 7.00% - 15.00% | |
| Costs Paid by seller | 2.00% - 3.00% | |
| Total roundtrip cost | 7.00% - 15.00% |
Property Holding Tax
Real estate tax is levied on the total value of properties in Aruba. No tax is applied if the property's value is AWG 120,000 or below.
A progressive tax rate is applied for properties valued over AWG 120,000:
- 0.2% for properties valued between AWG 120,000 and AWG 250,000.
- 0.3% for properties valued between AWG 250,000 and AWG 500,000.
- 0.4% for properties valued between AWG 500,000 and AWG 750,000.
- 0.6% for properties valued over AWG 750,000, as well as for properties owned by non-residents and legal entities.
The assessment period is every 5 years, and property owners are responsible for paying this tax in four equal installments annually.