Expatriate Taxation: Income Tax and Property Tax in Lebanon

Published on April 23, 2026 and written by Cyril Jarnias

The economic crisis, the collapse of the Lebanese pound, and the de facto dollarization of the economy have profoundly disrupted taxation in Lebanon. For an expatriate who works, invests, or owns real estate, income tax and property tax no longer come down to a few rates to remember: you need to understand a hybrid system—territorial for some types of income, worldwide for others, heavily dependent on tax residency, and increasingly shaped by successive budget laws.

Tax Residency and the Principle of Territoriality

The first question an expatriate must settle is that of tax residency. The legal definition determines nearly everything else: taxable base, scope of taxable income, and filing obligations.

In Lebanon, an individual is considered a tax resident if they meet at least one of the following conditions:

– have a fixed place of business in the country,

– maintain a permanent home used as a habitual residence,

– stay more than 183 days (six months), continuously or not, within a 12‑month consecutive period.

For companies, residency is established if the entity is incorporated or registered under Lebanese law, if it has a registered office in Lebanon, or if the effective management and control are exercised in the territory for more than six months.

Once this status is clarified, the tax logic differs significantly between residents and non‑residents.

Residents and Non‑residents: Who Is Taxed on What?

Lebanon applies a form of territoriality for earned income, but not uniformly:

The Lebanese tax is not a global income tax per household: husband and wife are taxed separately, and income categories are compartmentalized (salaries, professional profits, investment income, real estate income). This compartmentalization has practical consequences: you may be lightly taxed on your salary and more heavily on your rent, or vice versa, depending on the rates specific to each category.

Income Tax for Expatriates: Salaries and Professional Income

For a salaried or self‑employed expatriate, the starting point is the territoriality of salary. Salary income is taxable in Lebanon in several situations:

– the recipient is a tax resident of Lebanon, regardless of the source of funding;

– the services are performed in the country or benefit a Lebanese company, even if the salary is paid from abroad;

– the source of funding is in Lebanon, even if the employee lives abroad.

In other words, being funded in dollars by an overseas entity is not enough to escape Lebanese tax if the activity benefits a Lebanese entity or is physically carried out on site.

Progressive Rates on Salaries and Wages

Salaries and pensions are subject to a progressive scale. Since the crisis, the brackets have been raised several times to account for hyperinflation. The 2022 Budget increased the annual brackets, then the 2024 Budget expanded them again, particularly for professional profits.

Retirement pensions and similar benefits benefit from rates reduced by half. In practice, the taxable base takes into account family deductions, which were substantially increased by the 2024 Finance Law.

Family Deductions: A Major Shift

Deductible family allowances have been dramatically increased. Whereas before 2024 the annual deduction for a single person was 37.5 million LBP, the 2024 Finance Law set new ceilings:

These amounts, confirmed for the calculation of 2025 tax, significantly reduce the taxable base for families, allowing many expatriates with children to remain in the lower brackets despite the inflation of nominal salaries.

Professional Income and Business Profits

Income from self‑employment and profits of small businesses are taxed separately, also progressively. The legislature raised the brackets to account for currency depreciation:

An excerpt of a typical scale for individuals’ profits or partners in partnerships shows the progressivity:

These historical figures have been revalued in current LBP by recent budget laws, but the proportional structure remains the same: the higher the profit, the higher the marginal rate.

Specific Regime for Non‑residents: Withholding Tax

Non‑residents who invoice services or sell goods to Lebanese clients are subject to withholding tax. The 2024 Budget tightened this regime, via Decision No. 791:

– the taxable base is set at 50% of the invoiced amount for services,

– at 20% for other activities (sale of goods, materials, etc.);

– on this base, a rate of 17% is applied.

In practice, this results in effective flat rates of:

Since 2024, this withholding must be declared and paid in the same currency as that used to pay the non‑resident (dollars, euros, etc.), which officializes the practice of payment in foreign currency.

Investment Income, Capital Gains, and Expatriate Investors

For an expatriate investing in shares, bonds, or companies in Lebanon, the regime for investment income and capital gains plays a key role.

Investment Income: Interest and Dividends

Investment income generated in Lebanon is subject to a 10% withholding tax, which applies in particular to:

– distributed dividends,

– interest,

– remuneration of shares or partnership interests,

– directors’ fees,

– distributions of reserves or profits.

This withholding is described as “final” for many taxpayers, meaning it settles the tax on that income. Interest received special attention: Law No. 64 of October 26, 2017 set the tax on interest income at 7%, particularly for bank deposits and certain securities.

Capital Gains on Shares and Partnership Interests

The taxation of capital gains has become more sophisticated, especially for expatriates who hold interests in Lebanese or foreign companies.

A Ministry of Finance decision (Decision No. 323 of May 15, 2023) distinguishes several scenarios:

This framework allows an expatriate investor to structure their holdings based on the nature of the investment (long term, speculative, real estate, etc.) and the type of company.

Real Estate Capital Gains: The 15% Rate and Exceptions

Capital gains from the sale of real estate were significantly tightened by Law No. 64 of 2017, which raised the rate from 10% to 15% for transfers of real property, excluding other fixed assets.

However, several mitigations exist:

– the 15% tax does not apply to individuals who transfer up to two primary residences held for more than 12 years;

– for certain taxpayers, the capital gain on real estate is reduced on a declining basis at a rate of 8% per year of ownership from the date of acquisition;

– except in the case of a “property dealer,” capital gains realized by an individual are not treated as commercial profits.

For an expatriate selling an apartment held for a long time, these rules can result in very low taxation, or even exemption, if the holding period is long and the property is a primary residence.

Real Estate Companies and Share Transfers

The 2022 Budget introduced a specific tax on capital gains from the transfer of shares in certain real estate companies:

– for a resident transferring shares of a joint‑stock company whose main activity is real estate acquisition, promotion, or development, or where more than 50% of fixed assets are real estate, the gain is taxed at 3%;

– for a non‑resident, this rate increases to 5%;

– the taxable base is the difference between the sale price and the acquisition cost;

– a 50% reduction of this tax is granted if the transfer occurs between existing shareholders or between parents and children;

– the transfer of shares in other joint‑stock companies (non‑real estate) remains exempt for individuals.

For an expatriate holding interests in a Lebanese real estate holding company, this regime is therefore crucial: taxation occurs at the level of the sale of shares, not just at the level of the sale of the underlying properties.

Real Estate Taxation: Property Tax, Built Property Tax, and Municipal Taxation

For many expatriates, the main tax link with Lebanon is through real estate: buying an apartment, renting it out, holding an empty pied‑à‑terre, or rental investment. Property taxation in Lebanon combines several layers: registration and transfer fees, built property tax, municipal taxes, and, where applicable, capital gains taxation.

Buying a Property: Registration, Duties, and Costs

When acquiring a property, a “package” of taxes and fees falls on the buyer. Frequently cited figures are as follows:

In addition, some texts mention a 5% transfer tax based on the “fair value” of the property, which coexists with registration duties. Depending on the exact nature of the transaction and the laws applied (annual budget law, special regime), the total upfront cost can vary around 6–10% of the price.

Built Property Tax: An Annual Tax on Rental Income

The built property tax, established as early as the 1920s and consolidated by the 1962 law, is the core of national property taxation. It is an annual tax collected by the Ministry of Finance on the net rental income of buildings located in Lebanon.

The mechanism is based on several elements:

– the taxable base is the annual rental value of the property, either actual (rent actually received) or estimated by the administration;

– certain charges are deductible, including:

– depreciation (up to 5% of the rent),

– management and overhead costs (up to 5% of the rent),

– maintenance costs and income‑generating expenses;

– the net base thus obtained is subject to a progressive rate ranging from 4% to 14%.

A typical scale for the built property tax, expressed in LBP, can be summarized as follows:

These brackets have been regularly adjusted over time, and the 2024 Budget again revalued the net income ranges, now between approximately 1.2 billion and 6 billion LBP for the higher brackets. But the graduated structure of 4–6–8–11–14% remains the foundation of the system.

Exemption for Vacant Properties: A Costly “Gift”

A major peculiarity, which concerns many expatriates holding an unoccupied pied‑à‑terre, is the exemption for vacant buildings. Article 15 of the built property tax law explicitly provides that properties with no occupant and no rental income are exempt, on the grounds of “cessation of income.”

At the same time, the municipal levy on rental value — another important property tax — is also structured as a charge borne by the occupant (owner‑occupier or tenant). Through this mechanism, an empty apartment escapes both the built property tax and the municipal tax.

Research conducted in Beirut has shown that this exemption has a very high cost for public finances. Based on data on residential vacancy, it was estimated that:

– over 23% of housing units built between 1996 and 2018 in the municipality of Beirut were unoccupied;

– annual losses for the municipality of Beirut alone, due to the exemption of vacant properties, would exceed 33 million dollars, or about 13% of its annual budget of approximately 240 million dollars;

– with higher vacancy rates (above 50% in certain categories of properties), potential losses could reach 86 million for the municipality and 260 million for the Ministry of Finance.

Municipal Tax on Rental Value: A Local Tax Paid by the Occupant

In addition to the built property tax, municipalities collect a tax on the rental value of buildings, under Law 60/88 on municipal taxes and fees.

The principles are as follows:

– the tax is based on the annual rental value of the property, either actual or estimated;

– it is payable by the occupant or the investor of the property: owner‑occupier, commercial tenant, sub‑tenant, etc.;

– rates vary according to the use of the property, with a common pattern:

– 10% for residential use;

– 15% for commercial or professional use;

– some sources also mention that municipalities cannot levy less than 1% nor more than 3% of the rental value, but in practice, much higher effective rates are applied in large cities.

In practice, effective annual rates of 5 to 12% of the rental value are observed in major urban areas, when combining built property tax and municipal charges.

The law provides for minimum amounts of annual municipal tax:

This floor, symbolic given recent inflation, now only plays a technical role. In reality, the key issue is how each municipality reassesses the rental value based on changes in the exchange rate and rents in dollars.

Explosion of Municipal Taxes Since 2022

Since the 2019 crisis, municipal finances have been ravaged by the collapse of the pound. To continue providing basic services — waste collection, lighting, street maintenance — many municipalities have chosen to sharply raise taxes.

Illustrate the reality

Testimonials from entrepreneurs in Beirut and Jbeil

In Jbeil, the figures show how taxation followed the dollarization of the economy:

– before 2019, an owner paid on average 135,000 LBP, a trader 300,000 LBP;

– in 2022, the municipality applied a rate of 4,000 LBP per dollar for residents, and 8,000 LBP per dollar for businesses, raising the average bill to 360,000 LBP for a home and 1.6 million for a business;

– in 2023, the commercial tax was fully “dollarized,” based on a rate of 80,000 LBP per dollar, while residents were given a more lenient rate of 25,000 LBP per dollar.

In Beirut, the municipality long continued to tax based on the historic official value of 1,500 LBP per dollar, but finally changed course in early 2023:

The dollar was worth approximately 89,000 LBP at the time of these adjustments. Beirut therefore remains relatively “moderate” compared to Jbeil, where businesses are taxed close to the market rate, but the increases are nonetheless very steep for expatriates renting a commercial space or a home in a central neighborhood.

Effects on Expatriate Owners

For an expatriate owner of an income‑producing building or a property leased to a business, this tax inflation has concrete impacts:

– rents, often set in dollars or indexed, must suffice not only to cover maintenance costs, but also a local tax burden that has sometimes multiplied by ten;

– municipalities sometimes accept payment in installments, as in Beirut, but this does not change the final amount;

– some owners choose to leave premises vacant, even at the cost of lost income, to avoid a municipal tax that has become disproportionate compared to the tenant’s turnover.

From a strictly fiscal perspective, an expatriate often finds themselves weighing net rental profitability against local tax pressure in a context of high monetary volatility.

Non‑residents, Withholding Taxes, and Lebanon‑Source Income

For an expatriate who is not a tax resident of Lebanon but receives income there, the principle is clear: only Lebanon‑source income is taxable, but it is taxed through specific mechanisms, primarily withholding taxes.

Non‑resident Service Providers or Suppliers

As indicated above, services and sales invoiced by a non‑resident to a Lebanese client are subject to withholding tax. The Lebanese client is responsible for:

Since 2024, the law requires that the declaration and payment be made in the same currency as the invoice. The Ministry of Finance has also introduced new adapted forms.

Foreign Investment Income of Residents

An expatriate resident in Lebanon who receives income from foreign securities (shares, bonds) must comply with the obligations of Article 82:

Failure to comply with these obligations is treated as tax evasion under the Tax Procedure Code (Law No. 44 of 2008), with a criminal penalty regime that can be initiated without prior notice.

Expatriate Property Owners: Summary of Main Property Taxes

To clarify what an expatriate owning property in Lebanon may be required to pay each year, the main levies can be summarized in the following table (excluding capital gains on resale):

For an expatriate, the actual combination will depend on the situation: personal residence not rented (often very lightly taxed), rental property (built property tax + municipal taxation + possibly capital gains tax), commercial premises (much stronger municipal pressure).

Administration, Payment, and Penalties

The Ministry of Finance has gradually modernized the tax administration. Many taxes can now be declared and sometimes paid via electronic services or through payment companies like OMT.

For the built property tax, an owner can for example:

– print the appropriate form,

– go to an OMT point,

– pay in Lebanese pounds,

– receive a receipt and a stamped form.

Late Payment Penalties

Penalties for late payment are severe and also apply to expatriates:

Certain budget laws (2019, 2020) have temporarily introduced amnesties and penalty remissions, but these were exceptional operations, subject to strict deadlines and mandatory down payments.

Double Taxation, Tax Treaties, and Special Cases

Lebanon has an extensive network of double taxation treaties with more than 30 countries, including France, Italy, Jordan, the United Arab Emirates, Turkey, and Egypt. These treaties allocate taxing rights between states, generally reduce withholding taxes on dividends, interest, and royalties, and provide for tax credit mechanisms.

To benefit from the advantages of a tax treaty with another country, an expatriate must generally obtain a tax residency certificate from the Lebanese Ministry of Finance, then present it to the administration of the other state.

Toward a “Pro‑Diaspora” Regime? Proposal for a Flat‑Rate System on Foreign Income

In the Lebanese tax debate, several experts advocate for a “wealth‑friendly” system aimed at attracting expatriate capital. One scenario under consideration would be an optional regime in which:

Proponents of this idea point out that income earned abroad by Lebanese is already taxed in the source country, and that heavy double taxation discourages the return of capital. They see it as a way to stem capital flight and encourage wealthy members of the diaspora to invest in Lebanon.

For now, this mechanism remains a proposal. It would require, among other things, better activation of existing double taxation treaties and a political debate on the balance between tax fairness and the country’s attractiveness.

Conclusion: What an Expatriate Should Remember

For an expatriate in Lebanon, income tax and property taxation operate on several levels simultaneously:

In an unstable monetary and political environment, these rules continue to evolve with each annual budget law. An expatriate working or investing in Lebanon therefore has an interest in closely monitoring updates from the Ministry of Finance, or even seeking local advice, especially for structuring real estate holdings or interests in companies. The combination of a highly detailed system, a volatile currency, and municipalities seeking revenue makes tax planning more essential than ever.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

Find me on social media: