Jordan's buildings and land tax within municipal boundaries is levied on the annual net rental value of the property, at a rate of ten percent for buildings and two percent for undeveloped land, with exemptions for entities such as archaeological sites and government-owned property, and discounts for early payment.
How is the taxable value calculated?
The annual rental value of a building — the rent it is expected to fetch in a year — minus one-fifth for depreciation from age and use, is considered its net annual rental value on which the tax is based. If the building is not rented, or the assessment committee finds that the stated rent does not equal the true rental value, the committee assesses the annual rental value taking into account the building's size, materials, location, manner of use, and the rent of similar neighboring properties.
The tax rate on buildings and land
The tax rate is ten percent of the net annual rental value for buildings, including the yard on which they stand and that surrounds them, and two percent of the net annual rental value for land that is not a building's yard. The tax accruing on buildings and land within any municipality's boundaries, together with fines, belongs to that municipality, while the Ministry of Finance collects it on the municipalities' behalf.
Exemptions and discounts
Exempted from this tax are property belonging to the King, the Hashemite Kingdom of Jordan's government, and municipalities; archaeological sites; any building or land within the walls of Jerusalem; property of recognized sports, cultural, or social clubs; and property of licensed religious or charitable bodies if used for the purposes for which they were established, subject to Cabinet approval. An owner is also exempted from half the tax due on a building if it is proven the building was not occupied in any way throughout the year the tax accrued. To encourage early payment, a taxpayer is exempted from 8% of the tax due if paid before the end of February, from 6% if paid during March and April, and from 4% if paid during May and June of each year.
Illustrative example
- Suppose the annual tax due on a building is 500 dinars and the owner pays it before the end of February; the owner is exempted from 8% of it, i.e. 40 dinars, and pays only 460 dinars. These are hypothetical figures for illustration only.
Penalty for not paying the tax
If the tax is not paid during the financial year in which it accrued, an additional amount is collected from the taxpayer as a fine at ten percent of the amount due, and the fine is increased by another ten percent if it is not paid during the following assessment year, and so on, provided the total fine does not exceed 50 percent of the tax due.
Legal References
- Buildings and Land Tax Law Within Municipal and Local Council Areas No. 11 of 1954 — Article 7 (tax basis and assessment rules)
- Buildings and Land Tax Law Within Municipal and Local Council Areas No. 11 of 1954 — Article 12 (exemptions and reductions)
- Buildings and Land Tax Law Within Municipal and Local Council Areas No. 11 of 1954 — Article 13 (tax rate)
- Buildings and Land Tax Law Within Municipal and Local Council Areas No. 11 of 1954 — Article 15 (penalty for non-payment)
For questions about your specific situation, you can ask the Jordan Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.