What is the Property Tax System - "Al-Musqafat" in Jordan?

The word "tax" itself evokes resentment among citizens worldwide, not just in Jordan. This is especially true for property taxes, or as they are referred to - "Musqafat," which is particularly concerning for people. Perhaps the reason for this is the limited knowledge of the property tax system and the reasons for its imposition. In this article, we will focus on the details of Musqafat and the Musqafat tax rate in Jordan.

Property Tax System - Musqafat 

Musqafat is a tax introduced by the government on the real estate sector, specifically targeting property owners who own one or more properties, such as residential and commercial buildings, factories, lands, exhibitions, etc. The Musqafat tax rate is determined, and property owners are required to pay it once annually. The revenue generated goes to the Greater Amman Municipality in the capital province and municipalities in the rest of the kingdom. The state relies on the Musqafat payment system to benefit from the consolidation of real estate data from all regions and provinces of Jordan. On the owner's side, regular and timely payment of property tax (Musqafat) allows comprehensive management rights over the owned properties.

Musqafat is estimated for all types of properties once by an authorized agent from the Department of Lands and Survey. This is done based on the Musqafat tax rate, determining the Musqafat value as a fixed amount paid once annually.

How to Calculate Musqafat 

The calculation of Musqafat is based on the specified Musqafat tax rate, determined by certain criteria, including:

- Location of the property

- Building area

- Type of construction

- Nature of the construction

The Musqafat tax rate is calculated as follows:

- 15% of the net estimate of buildings

- 2% of the net estimate of vacant land

The revenue from property taxes - Musqafat - is allocated to various government entities as follows:

- 10% of the Musqafat value is allocated to the Greater Amman Municipality

- 3% of the Musqafat value is allocated to sewage services - Ministry of Water

- 2% of the Musqafat value is allocated to education - Ministry of Education

Estimating Musqafat Value by Property Type 

You can estimate the Musqafat value for your property, regardless of its type, if you have an approximate value for all property-related information. This can be done by applying the following equations based on the Musqafat tax rate:

- Calculating Musqafat for Vacant Lands

  Annual Tax Due = Land Area x Market Square Meter Price x 2%

  Land Tax = Annual Tax Due x 2%

- Calculating Musqafat for Apartments (Owners)

  Annual Tax Due = Property Area x Square Meter Rent - 20% (Property Consumption Allowance)

  Building Tax = Annual Tax Due x 15%

- Calculating Musqafat for Rented or Ready-for-Rent Apartments (Empty)

  Annual Rental Value = (Lease Value for the Contract or Estimated Value) - 20% (Property Consumption Allowance)

  Tax and Fees Due = Annual Rental Value x 15%

- Calculating Musqafat for Rented or Ready-for-Rent Furnished Apartments

  Annual Rental Value = Estimated Rental Value - 10% (Furniture Rent) - 20% (Property Consumption Allowance)

  Tax and Fees Due = Annual Rental Value x 15%

Are There Financial Penalties if Musqafat is Not Paid? 

Musqafat is due at the beginning of each fiscal year. If the property owner fails to pay within the fiscal year, an additional 10% of the overdue tax value is added. This penalty may increase annually, reaching up to 50% of the overdue tax value.

We at Homes Jordan understand that making the right decision to buy, sell, or rent a property is not an easy task. With our specialized team of experts and consultants, we aim to broaden your knowledge in all aspects of the real estate sector before taking any concrete steps. This includes understanding the Musqafat amount due on your property in Jordan, empowering you to make informed decisions.

Here are some key points about Musqafat and how to calculate it in the property tax system 

- Tenants are exempt from paying Musqafat; it is imposed only on property owners.

- In addition to calculating Musqafat value, property owners can also find out the tax due on buildings and lands they own through the website of the Greater Amman Municipality.

- Property owners can object to the Musqafat value through the website of the Greater Amman Municipality / Department of Building and Musqafat Tax.

- Property owners are eligible for varying discounts on the property tax value if they pay the amount due within the first six months of the fiscal year.

In Homes Jordan, we are with you every step of the way in all details of your journey in the real estate sector, including buying, selling, and renting. Our team consistently strives to introduce the latest property management tools that match the requirements of our esteemed clients. Feel free to contact any team member for consultation and answers to all your queries.

All rights reserved for Homes Jordan - 2023. The article is written based on official government sources in addition to the following sources:

https://nashashibilaw.weebly.com/magazine/1267968

https://bestlawfirmjo.com/ماذا-يعني-ضريبة-المسقفات/#ما_هي_ضريبة_المسقفات