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For many people, owning a home or base is very important, but unfortunately it is something that many countries can make you pay taxes for. Today we are going to tell you which countries allow you to own property without automatically becoming a tax resident.

As we said, there are countries where the mere possibility of living there, i.e. simply having a home at your disposal, can make you a tax resident, regardless of how long you actually live there or the social and economic ties you may have in that country. And as we know, this often means paying taxes there on your worldwide income.

Thus, there have been huge cases such as that of the well-known tennis player Boris Becker who simply by having a home at his disposal in Germany ended up being considered a tax resident there.

And, of course, Germany is not the only country that adopts strict measures like this with regard to the mere possession of a home: other countries, such as Austria, also consider that a person is subject to taxation if he or she owns a home and maintains it with the intention of living there.

In the case of Portugal it also speaks in the “Artigo 16.º – Residência” of spending less than 183 days and becoming a tax resident by the mere fact of having a property and the intention to inhabit it. Specifically it says: “Tendo permanecido por menos tempo, aí disponham, em 31 de Dezembro desse ano, de habitação em condições que façam supor a intenção de a manter e ocupar como residência habitual;”

Although the Austrian and Portuguese regulations, for example, are not as strict as the German one, they also pose many dangers regarding their “interpretation” by the authorities: for example, the Austrian Finance Act states that “in order to constitute a domicile, the dwelling does not have to be used continuously. Recurrent use is sufficient. As you can see, the problems arise with this statement: what is recurrent? Once a month? Once a week? Five times a year? Not to mention the case of Portugal: what does it mean to have the “intention” to occupy a dwelling on a regular basis?

Often, authorities also speak of “main residence“. This term is also not delimited and clearly defined internationally. In some countries there is not even an obligation to register. In the countries that apply this rule, “main residence” is far from being official, and is only regulated by the length of stay in the country (normally, this would be the 183-day rule).

Hungary is a good example: in principle, owning a property in Hungary does not entail any tax liability. However, you would be considered a tax resident if that property in Hungary were your only residence. If you do not have an actual tax residence anywhere in the world (not even a flat) and you do not own any other property in any other country, you would be subject to taxation in Hungary.

Definitions in tax law

As mentioned in the introduction, certain terms are defined differently in all countries. You have probably heard of the centre of vital interests or economic interests in a country. Both concepts refer to tools that governments use to prove that you are a resident for tax purposes. Unfortunately, each country applies different criteria to determine whether or not you are a resident.

In the list below we have listed the individual definitions for each of the countries that do not bind you to tax obligations for owning property. However, to better understand the characteristics we highlight in the list, we first need to clarify some fundamental concepts.

Main residence

Your main residence is the place where you spend most of your time, and does not refer to the core of your life. If, for example, you spend nine months abroad and study there, but then return to your home country, you will not have established your habitual residence in the country where you spent nine months studying. Most student visas, including those for Australia and the United States, exempt you from paying tax on income earned abroad.

However, in countries with population registers, registration usually means that you will be taxed for the period of your stay. However, you can only officially register as a resident if you own a home, so habitual residence is basically a permanently available dwelling.

The centre of vital interests

This is the quintessential classic, which has already been the downfall of several celebrities (like Shakira, for example). Your centre of vital interests is the place where you spend most of your time compared to all other destinations. If, for example, you have moved your “domicile” to a low-tax country, but ultimately still live permanently in your home country, your centre of vital interests will clearly be where you currently live. Many people make the mistake of pretending that they live in another country – by deregistering in Germany without leaving the country, for example – but then fail to make sure that they really “settle” in this new destination.

Of course, you must live in the country you say you live in if you want to avoid problems. Perpetual Tourists have the advantage – or disadvantage – of not establishing a centre of vital interests anywhere, as they are often on the move and it is never clear where they spend most of their time.

When it comes to the centre of vital interests, the treasuries look at the reality of the facts: whether the credit card has been used in one country, how high the consumer spending is in one of your homes compared to the others, airline and train tickets, car rentals, petrol receipts, and so on. These facts alone do not generally make you a taxpayer, but can be used as evidence in a tax court proceeding.

Centre of vital interests can often be established by the mere fact that your spouse or dependent children live in a certain country: in these cases, the authorities usually assume that you have some kind of centre of vital interests in the country where your family resides. As a general rule, your family should always travel with you, or else you will have to resort to official separation (not necessarily divorce). This is especially important in Central Europe.

Economic interests in the country

In addition to the centre of vital interests, there may also be economic interests in the country. These play an important role in certain countries. The main difference with the centre of vital interests is that you do not need to be physically present in the country to have economic interests (i.e. capital gains income, teleworking…): you can be a partner in a company and never set foot in the country where it is located.

The 183-day rule

The 183-day rule is the standard way of determining whether you are a tax resident in a country. Basically, if you spend more than half of a calendar year (or 12-month period) in one country, it becomes impossible for you to spend more time in another country throughout that year, which gives rise to tax residency: by spending more time in one country than in any other, that country can start taxing you.

Sometimes, the 183-day rule does not require exactly 183 days. Some countries use shorter periods of 182 days, 180 days, 120 days or even 60 days. Some define these 183 days within a calendar year and others within a twelve-month period from the date of entry into the country in question.

There are also countries that use other periods in addition to the 183 days in order to determine tax residence. Ireland, for example, states that “a tax resident is a person who resides in the country for 183 days continuously in a calendar year or 280 days in two calendar years, whether continuously or interruptedly”.

Use of the dwelling or intention to use the dwelling

In some countries, only the facts determine what happens to the dwelling and whether or not it is actually used. In other cases, the regulations also take into account the “intention to use the dwelling”, which brings us back to the problem of “interpretation” by the authorities. What exactly does “the intention to use the dwelling” mean? How must a dwelling be designed or equipped for its owner to be said to have the intention to use it?

This is a grey area which, in case of doubt, can be interpreted either way. It is very likely that mere possession of an empty dwelling, for example, does not fall within this ambiguous definition. Total unoccupancy can also save you from paying taxes, provided that you do not actually have the possibility to sleep in the dwelling.

In general, we can say that if you own a property but rent it to someone on a permanent basis, you will not become a tax resident due to that property in any country in the world. Long-term rental is generally understood to be any period longer than 6 months in the case of contracts concluded with third parties. The authorities consider it legitimate for you to want to sell or rent a property available for several months, provided that you can prove beyond doubt your intention to do so through appropriate advertisements on the Internet or in the press, or through the intervention of a real estate agent. Since rental income is subject to a limited tax liability, the local tax authorities are usually aware of the permanent rental and can therefore also exclude the owner’s availability – and the corresponding tax liability.

Very important: the ownership of real estate through shell companies, foundations or trusts does not affect the availability. The availability of real estate always refers to the actual use of a natural person, even if that person is not the actual owner. Therefore, an anonymous or non-owner legal form may reduce the risk of being caught, but does not provide foolproof protection against tax liability. If you want to take a property available to you in countries with a strict definition of home availability (such as Germany or Sweden), no domestic or foreign legal form will be able to help you.

The most interesting option would be to sign a permanent rental contract with people you trust who actually use the property, or at least use it temporarily. The rent must correspond to its real market value and you will have to pay tax on the income, of course. In such a case, you could stay in your home for up to 182 days, but you would still run the risk of someone reporting you. 95% of the cases pending before the tax courts in Germany concerning the centre of vital interests originate from complaints by ex-partners, relatives or neighbours.

Those who opt for this model should keep a profile as low as possible and, ideally, not tell anyone that they are discharged and tax-free (not even those closest to them).

How owning property in different countries affects you

The safest solution if you want to own a home in a problematic country is to be protected by a double taxation agreement. If you live for more than 183 days in a country that has a double taxation agreement with the country where you have a home but do not want to be tax resident, the Tie-Breaker Rules of almost all double taxation agreements would protect you from becoming tax resident there (as long as your link to the country where you want to be considered tax resident is stronger than the one with the country where you have the property).

By the way, the availability of a property refers to its actual usability. If you only have housing that is permanently rented to third parties, it would not protect you in case of a tax dispute. When you read in our list that “you need another available dwelling”, this must not be rented to others permanently.

Now that we have clarified definitions and set out what we need to consider in order to become tax resident through a property, we can start with our list of the 50 countries where a property does not trigger tax obligations.

We cannot guarantee that the list will always be accurate and up to date when you read it, as conditions change regularly and can be reinterpreted in the courts. We have not included tax-free countries (such as Paraguay, the Emirates, Malaysia, etc.), because you can find them in our Emigration Encyclopedia, where we analyse in detail countries like these. Nor have we included many other countries that are not at all attractive for political, economic or geographical reasons.

Therefore, you will find here mainly those countries with worldwide income residence taxation that are suitable as destinations in which to establish a compliant bank residence. None of these countries will tax you – or tax you only to a limited extent – on the fact that you have a residence that is ordinarily available.

The countries on this list also operate without tax residency with the protection of a double taxation agreement, as explained above. In all of the 50 countries listed you can have a permanently available residence as a Perpetual Traveller without being considered a tax resident as long as you meet certain conditions (such as continuous availability of the residence or renting during your absence). Do not worry, we will explain these circumstances on a country-by-country basis. In addition, each definition also details the usual conditions for residence tax liability or other relevant factors which are often based on the availability of the property.

Argentina

To be a tax resident, you must have been resident in the country for at least 13 months. Having a permanent address is not a determining factor for taxation. Foreigners and their dependants are exempt from taxation in Argentina for a maximum of 5 years. Argentinean citizens are automatically taxable if they live in the country.

Armenia

The availability of housing is not a determining factor for tax purposes on its own. Tax liability is only triggered if more than 183 days per calendar year are spent in the country or if unspecified vital interests are held there.

Australia

You are considered tax resident in Australia if you have your sole residence there or if the 183 day rule applies to you. Therefore, if you can prove that you have a home in another country, a permanently available home in Australia cannot make you a tax resident. Holders of temporary visas (e.g. work or travel visas) are generally exempt from tax in Australia on income earned outside Australia.

Bosnia and Herzegovina

Bosnia has 3 autonomous tax districts with different regulations. In Republika Srpska and Brcko District, both available housing and the usual 183 days trigger the tax liability. However, in the heart of the Federation of Bosnia and Herzegovina, housing is not a determining factor for tax purposes, unless you have a residence permit or stay more than 183 days in the country.

Brazil

You are taxed according to the 183-day rule or the habitual residence rule. Therefore, foreigners should avoid usual residence permits in Brazil. Nationals are automatically taxed in the country. In any case, the availability of housing is not a determining factor in establishing tax residence.

Bulgaria

You are only considered a tax resident in Bulgaria if, in addition to a permanently available home, you have vital interests in the country. Therefore, a purely holiday home is not a problem as long as you avoid spending 183 days a year and neither your family nor your business centre is in the country.

Chile

You will trigger the tax liability if you stay in the country for six months within one year (continuously) or six months within two years (continuously or not), with the intention to remain in the country. The availability of a dwelling does not give trigger the tax liability as long as the residence criteria are not met.

China

The availability of a dwelling is not a determining factor in establishing tax residency. On the other hand, foreigners are generally exempt from taxation on foreign income even if they spend more than 183 days during the first 7 years of residence in the country. Spending only 31 days abroad during these 7 years allows you to restart the countdown at year 1.

Colombia

Tax liability is triggered after 183 days of residence in the country, whether it is a calendar year or a 12 month period. A single available residence may trigger tax liabilities if you do not have any other residence in another country. Tax residence in Colombia occurs if more than 50% of the income, assets or even real estate owned originates from Colombian sources. In principle, a property available in Colombia does not give rise to tax liabilities as long as there is at least one equivalent property elsewhere in the world – which should not be considered a tax haven in the eyes of the Colombian government.

Croatia

Ownership or availability of a dwelling triggers the tax liability in addition to the 183-day rule. However, if one owns or disposes of a dwelling outside Croatia, the tax liability is only triggered by secondary factors, such as one’s own family’s centre of vital interests or local economic interests. Therefore, a purely holiday home in Croatia will not cause you any problems as long as you have another home somewhere else in the world.

Cyprus

Cyprus may be a good option to establish a residence that allows you to open bank accounts in Europe, even without applying for non-dom status. A 60-day stay is sufficient to become a tax resident, although you would need to receive a salary from a Cypriot company that pays social security contributions. Normally, only the 183-day rule applies. Ownership and availability of a home is required for a residence permit, but is irrelevant in determining tax residency, which allows permanent ownership of real estate in Cyprus without any negative consequences.

Czech Republic

Again, there is a small exceptional case here: the mere possession of a property does not trigger tax liabilities, but the “intention” to live there permanently does, as does the 183-day rule. In practice, if you want to be on the safe side, you will have to exclude the permanent availability of the property by means of, for example, a subletting contract. If the property is rented to third parties for more than 183 days per year, you should not be subject to tax obligations in the Czech Republic.

Denmark

Denmark exempts you from taxation if your property is only used for holiday purposes for a short period of time. It is therefore possible to own real estate as long as the property is not used permanently (usually more than 2 consecutive months) and the property is rented out to other guests during absences.

El Salvador

Not only is housing not a determining factor in establishing tax liability, but El Salvador applies a single requirement of 200 days of residence to trigger tax residency – unless the income is mainly earned within the country. Therefore, there is not much to say against potential crypto-investment in this Pacific Ocean country.

Estonia

As long as the dwelling is used for less than 183 days, no tax liability arises. Therefore, a purely holiday home is a valid option as long as it is rented and not at your disposal during your absences.

France

You are resident for tax purposes if your habitual residence or your family (spouse, children) live in the country, if you work in the country or if your centre of economic interests is in the country. France may also make you a tax resident if you spend more time in France than in other countries, even if it is less than 183 days. The availability of a holiday home does not carry tax obligations as long as you can prove that you have a dwelling in another country or that the property in France is not available for 183 days or more (because you may have rented your French home to a third party).

Georgia

Tax liability arises after 183 days of residence in the country, whether it may be a continuous stay or not. Housing is not a determining factor in establishing tax residence, although this would not really be a problem either because of the territorial taxation applied by Georgia.

Greece

In principle, having a dwelling available is not a determining factor for establishing tax residence in Greece. However, it can be considered as part of personal wealth, which should not be mainly concentrated in Greece. As long as your assets are mainly located outside Greece and your family lives mainly outside Greece, your holiday home will not be a problem for you. You do not even need to rent the property during your absence.

Hungary

If your residence in Hungary is the only one you have, you will be subject to taxation in Hungary. Otherwise, the 183-day and centre of vital interests rules apply. Therefore, you must have at least one other available residence in another country in order not to trigger tax obligations.

Iceland

After 183 days within 12 months – from the date of entry – you become a resident for tax purposes. The permanent availability of a property is not decisive for the Icelandic authorities.

Ireland

You will be considered resident for tax purposes if you spend 183 days during a calendar year or 280 days during two calendar years in the country, provided you have spent at least 30 days during the current year. The availability of a home is not taken into account in Irish tax law. You can buy or rent a home here and leave it empty during your absence without any problem.

Israel

The mere availability of dwelling is not a determining factor under Israeli tax law. You become a tax resident after 183 days of presence in the country or 425 days over 3 years, provided you have spent at least 31 days in Israel in the current year.

Italy

You will be considered a tax resident if you stay in the country for 183 days or register as a resident. A home may give rise to tax liability if it is used as a permanent residence. If you have another home elsewhere in the world or can prove that you cannot use the home in your absence by subletting or renting it out, a purely holiday home will not cause you any tax trouble in Italy.

Japan

Rental contracts of a maximum duration of one year do not generate tax liabilities in Japan, but home ownership does. However, foreigners are exempt from foreign income tax for the first 5 years of residence.

Kosovo

Tax residency is generated after 183 days of residence in the country. The availability of dwelling is not a determining factor.

Latvia

In addition to the 183 days of presence, a declared dwelling in Latvia triggers tax obligations. If you do not register your property in order to obtain a residence permit in Latvia, you will not trigger any tax liability. Therefore, the mere possession or availability of a holiday home does not pose a problem.

Liechtenstein

Without a residence permit and with less than 183 days in the country, a permanently available property does not usually give rise to local tax liabilities.

Lithuania

Both your centre of vital interests and a stay of 183 days during a calendar year give rise to tax liabilities. The dwelling is not decisive as long as there is at least a second equivalent dwelling in another country, or the availability of such a dwelling is excluded through subletting.

Maldives

To be taxable, you must be ordinarily resident or spend 183 days in the country during a 12-month period. Therefore, a holiday property will not give you any problems as long as you have homes in other countries.

Malta

In general, you are only tax resident there after 183 days of presence – or after 3 months if you have HNWI status. Owning a property is not a determining factor for establishing a tax liability.

Mauritius

The mere ownership or availability of a property does not trigger tax liability as long as other dwellings are available. Otherwise, the 183-day rule applies for one year or 270 days within 36 months.

Mexico

You would only be liable to pay tax after 183 days of stay. One dwelling there may give rise to a tax liability if it is the only one you own. If you have more than one dwelling and less than 50% of your income comes from Mexican sources, you would not be a tax resident in Mexico.

Mongolia

Having a permanent home in Mongolia is not a determining factor for tax purposes. On the other hand, a presence of more than 183 days and 50% of your income coming from Mongolia is a determining factor.

North Macedonia

In this case, you become a tax resident if you reach or exceed 183 days of presence or have a declared residence in North Macedonia. Therefore, if you do not register your property (necessary to obtain a residence permit there), you will not become a tax resident. Thus, a holiday home owned or available will not give you any problems.

Norway

Another special case of the 183-day rule: both 183 days in a 12-month period and 270 days in a 36-month period give rise to a tax liability. As in Iceland, the mere availability of a dwelling is not decisive here. Therefore, you should not worry about owning a home for holiday purposes.

Peru

If you spend at least 183 days in Peru, you will be subject to tax. The availability of housing is not a decisive factor in determining tax liability.

Philippines

Tax resident status is acquired after staying in the country for 180 days within a calendar year. The availability of housing is not a determining factor for tax purposes.

Poland

Tax resident status is acquired after staying 183 days in the country or establishing your centre of vital interests within the country. Available accommodation in Poland is not a problem as long as it is rented during your absence or you have other properties in other parts of the world.

Singapore

You are subject to taxation under the 183-day rule. The availability of housing is not decisive for the establishment of tax residence.

Slovakia

The mere availability of a home does not give rise to tax obligations. For this obligation to arise, it must be clear that you really want to use the property for a permanent period. Occasional stays for holiday purposes are therefore not a problem. In principle, however, you should have other accommodation in other parts of the world or rent the property to other guests during your absences in order to keep yourself safe from the authorities.

Spain (with reservations)

If you have your centre of vital interests in Spain or spend 183 days in the country during a calendar year, you will be considered a tax resident. The centre of vital interests is established by the spouse and children or by strong economic interests in the country. The question of whether the availability of a home can give rise to tax liability in Spain is currently pending before their Supreme Court. However, it can be assumed that the mere availability of holiday property in Spain will not trigger any tax liability. This, coupled with the fact that in Spain you will be able to obtain a tax number (NIE) by having a property there, may make Spain an interesting destination for your desired residence.

Switzerland

Switzerland is an interesting case within German-speaking Europe. The mere availability of housing does not give rise to tax residence as long as it is not accompanied by a settlement permit. However, it is not possible to rent or own a house without such a permit, except in a few areas. Moreover, with 90 days of residence and only 30 days of paid work in the country you would fall into its tax “clutches”.

Thailand

In theory, you become a tax resident if you stay in the country for 180 days. The availability of housing is not relevant for tax purposes.

Tunisia

Tunisia bases tax liability on the existence of a single available dwelling in the country. If you have other dwellings in other parts of the world, you will only be liable to tax in Tunisia after 183 days of presence in the country.

Turkey

The availability of a property in Turkey is not a determining factor for tax liability as long as you do not have a residence permit or are present in the country for more than 183 days. Turkey is a very attractive holiday real estate destination, and we bet that it will continue to be so in the coming years.

Ukraine

The availability of a property only gives rise to tax liabilities in Ukraine if you do not have an equivalent property in another country. In such cases, the tax authorities will check several criteria relating to the centre of vital interests, which must be established outside the country if you want to avoid tax liability.

United Kingdom

The rules on UK tax residence are very complex, but HMRC presents them in a transparent way.

In principle, if you stay in the UK for 91 days and your only residence is in the UK, you become a UK taxpayer. In addition, the usual 183-day rule also applies. Anyone who has been a UK tax resident for the last 3 years and has been in the UK for less than 16 days automatically ceases to be a UK taxpayer. Those who have not been taxed in the last 3 years can stay for 46 days in the UK without fear, with or without a home in the UK.

The availability of housing plays a “Sufficient Tie” role, along with family, work, 90 days residence and citizenship. Put simplistically: non-UK nationals usually have up to 182 days of stay in the country without triggering tax liability, despite the availability of a home. If they have an additional “link”, the stay is reduced to 120 days; if they have another link, it is reduced to 90; and with another link to 45 days. Generally, UK nationals must stay less than 90 days if they want to avoid a tax liability due to the availability of housing. However, if you have more ties, spending more than 16 days in the UK can be enough to get you into trouble with the tax authorities.

In principle, however, the availability of holiday accommodation in the UK is not decisive for tax purposes, especially for foreigners, as long as you stay in the UK for less than half a year and for purely personal (non-work) reasons.

United States of America

In the United States of America, the availability of a home also does not give rise to any tax liability. Here, the 183-day rule prevail, as well as the Substantial Presence test, which takes into account the last 3 years of residence according to a certain formula. To fall under this definition, you must spend 31 days in the US during the current year and 183 days between the current year and the previous two years. Each day of residence in the current year counts in full, days in the previous year count by one-third, and days in the previous two years count by one-sixth. Basically, you will be safe as long as you stay in the country for a maximum of 120 days on average over these 3 years.

However, the US alone is not really useful as a destination for legal compliance because of its FATCA system: US residents are denied most accounts and exchanges outside the country to avoid cumbersome US regulations. You would therefore be heavily reliant on the US system. However, a property available in the country as a residential address can also provide you with certain advantages (for the use of USA LLC, for example) as long as you are careful that such a construction does not trigger a permanent establishment.

Uruguay

Uruguay is a special case regarding the value of property: in principle, ownership of a dwelling does not generate tax obligations, but there is a maximum value that dwelling can have. From about USD 2.1 million of real estate value and with the existence of economic interests in the country (centre of vital interests), you would be considered a tax resident.

Vietnam

If you spend 183 days in Vietnam within a calendar year or within 12 months from the date of entry, you will be taxed in the country. The availability of housing entails a tax liability if you rent or have the property registered on your identity card for more than 183 days. Therefore, the availability of housing for purely tourist purposes and without a residence permit does not usually entail tax obligations.

Concluding the article

This is the end of this article, in which we have touched on a subject that many of our clients and readers ask us about: in which countries they can own a home without becoming tax residents and paying taxes.

Of course, the list is not intended to be exclusive – you could also own a property in non-taxed or territorially taxed countries, such as Costa Rica, Panama, Paraguay or Malaysia – but we hope it has given you a good idea of the options you have to establish bases without automatically becoming a tax resident.

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