Houses on Leased Land
Long-lease fee is applied only to long lease properties. The Government of Aruba through Domain Control (Directorate of Land Administration) gives out the long-lease properties. The long-lease properties are given out for a period, usually, of 60 years. The long-lease fee is determined at the beginning of the contract and is fixed for the duration of the long-lease period. The long-lease fee is collected yearly and is 6% of the appraised value, determined by Directorate of Land Administration. The fee varies based on location and size of property and is fixed for the period of 60 years. Long-lease fees range between $200.00 and $600.00 per year.
The yearly tax you have to pay is called land tax. This land tax is based on the selling price or the tax value, which ever is higher. Non-residents pay a tax rate of 0.6 % of the value. The rate for commercial buildings is also 0.6 % of the value. Residents pay the following rate:
Value Tax rate
Afl 0 - Afl 250.000 0 %
Afl 250.001- Afl 500.000 0.2 %
Afl 500.001- Afl 750.000 0.4 %
Afl 750.001 and above 0.6 %
If you own a house on a long-lease land, in addition to the long lease fee you also have to pay real estate property tax.The Tax Department reviews real estate property tax every five years.
Closing costs
When an immovable property is transferred (when a property changes hands through a purchasing agreement, inheritance, a gift, etc.), you have to pay a property transfer tax to the government. The notary public withholds this transfer tax for the government at the time of transfer. The transfer tax rate is 3% (when purchase price is below Afl. 250.000,00 )or 6% (when purchase price is above Afl. 250.000,00) of the highest value (determined by the notary public) between the appraised value of the Tax Department and the transaction (economic value) value (if applicable), 1% Notary fees transfer deed of the selling price and 1% Notary fees mortgage deed of selling price. ( total 5%)
Duration of stay at Aruba
Visitors to Aruba need proof of identity and are allowed to stay up to 30 days. For citizens from countries like the United States and Canada, whose country has a visa abolition agreement with the Netherlands, the length of stay may be up to three months. Citizens of the Netherlands and Netherlands Antilles may stay on Aruba up to six months.
If you own a home, your visa can be extended up to three months, but not exceeding three months per year, if you can show the Immigration Department of Aruba that you own a house and you carry or can prove you have sufficient funds to cover your length of stay. If you want to stay longer, you need special permission, granted by DIMAS, to extend your stay. Each petition is handled on a case-to-case basis and permission granted based on merits.
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1. Long-Lease Properties:
- Long-lease properties in Aruba are granted by the Government through the Domain Control, specifically the Directorate of Land Administration.
- These properties are typically leased for a period of 60 years.
- The long-lease fee is established at the beginning of the contract and remains fixed for the entire 60-year duration.
- The fee, set at 6% of the appraised value determined by the Directorate of Land Administration, is collected annually.
2. Property Taxes:
- Land tax, referred to as the yearly tax, is applicable based on the selling price or the tax value, whichever is higher.
- Non-residents pay a fixed tax rate of 0.6% of the property value.
- For commercial buildings, the tax rate is also 0.6% of the property value.
- Residents have a tiered tax rate based on property value, ranging from 0% to 0.6%.
3. Real Estate Property Tax:
- If you own a house on long-lease land, you are obligated to pay real estate property tax in addition to the long-lease fee.
- The Tax Department reviews real estate property tax every five years.
4. Closing Costs:
- Property transfer tax is incurred when an immovable property changes hands, with rates set at 3% or 6%, depending on the purchase price.
- Notary fees, both for the transfer deed and mortgage deed, each amounting to 1% of the selling price, are also part of the closing costs.
5. Duration of Stay at Aruba:
- Visitors are allowed to stay up to 30 days, with the possibility of extension.
- Citizens from certain countries, like the United States and Canada, may stay up to three months due to visa abolition agreements.
- Homeowners can extend their visa for up to three months per year by demonstrating ownership and financial capability.
- Longer stays require special permission from DIMAS, granted on a case-by-case basis.
Aruba's property ownership and residency regulations involve a nuanced interplay of long-lease arrangements, taxes, and immigration policies, and understanding these intricacies is crucial for those interested in investing or residing in the region.
