Property Taxes in North Macedonia

Non-resident individuals are generally subject to North Macedonian tax only on income derived from sources in North Macedonia, including income from real estate situated in the country.

Income Tax

North Macedonia applies a flat 10% personal income tax rate to most categories of individual income, including employment, self-employment, rental income, capital income and capital gains.

The taxable base depends on the category of income, as different deductions and expense allowances may apply.

Rental Income Tax

Rental income from real estate is subject to personal income tax at a flat rate of 10%.

The taxable amount is determined after applying the applicable expense deduction. Individuals can generally choose between statutory deductions and documented actual expenses.

For unfurnished residential or commercial property, a standard deduction equal to 25% of gross rental income is available. Consequently, 75% of gross rent is taxable, producing an effective tax burden of approximately 7.5% of gross rental income.

For furnished residential or commercial property, the standard deduction increases to 30% of gross rental income, leaving 70% taxable and producing an effective tax burden of approximately 7% of gross rental income.

Alternatively, taxpayers may claim actual documented expenses instead of the standard deduction where this produces a more favorable result.

Capital Gains Tax

Capital gains realized by an individual from the sale of North Macedonian real estate are generally subject to personal income tax at 10%.

The capital gain is broadly determined as the difference between the property's selling price and its acquisition cost, taking into account qualifying investments and expenses under the applicable rules.

Where the taxpayer has lived in the property for at least one year before the sale, only 90% of the qualifying capital gain is generally included in the taxable base.

Capital gains from real estate may be exempt where the applicable statutory holding-period and residence conditions are satisfied, including qualifying long-term ownership situations.

Corporate Taxation

Companies are generally subject to North Macedonian Corporate Income Tax at a flat rate of 10%.

The corporate tax base is generally the company's accounting profit, adjusted for non-deductible expenses and other items prescribed by tax legislation. Qualifying expenses incurred in generating rental income are therefore generally deductible in determining taxable corporate profit.

Rental income and capital gains derived by a company are treated as ordinary corporate income and included in the company's general taxable base. Accordingly, corporate capital gains from real estate are generally subject to the standard 10% corporate income tax rate rather than a separate capital gains tax.

Foreign companies receiving certain North Macedonian-source income without operating through a local permanent establishment may also be subject to 10% withholding tax, including on qualifying income from the lease of immovable property, subject to relief under an applicable double taxation treaty.

Property Buying and Selling Taxes/Costs

Property Taxation

Real Estate Tax

Owners of real estate in North Macedonia are generally subject to an annual property tax imposed by the municipality where the property is located.

The tax is calculated on the property's assessed market value, as determined under the applicable valuation rules. Municipalities establish the applicable tax rate within the statutory range of 0.10% to 0.20%.

The actual annual liability therefore depends on the property's assessed value and the rate established by the relevant municipality.