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Everything you need to know before buying real estate is included in our Iran Property Pack
Understanding all property taxes and fees in Iran is crucial before making any real estate investment. Iran's property market involves various costs from transfer taxes to annual ownership fees that vary by location and property type.
If you want to go deeper, you can check our pack of documents related to the real estate market in Iran, based on reliable facts and data, not opinions or rumors.
Property buyers in Iran face transfer taxes of 5-15%, stamp duty of 0.5%, and registration fees of 0.1-0.5% of the transaction value.
Annual ownership costs include vacancy taxes in cities over 100,000 residents and luxury home taxes for properties exceeding 400,000 USD in value.
| Tax/Fee Category | Rate/Amount | Applied To |
|---|---|---|
| Transfer Tax | 5% (existing) / 15% (new) | Transaction value |
| Stamp Duty | 0.5% | Transaction value |
| Registration Fee | 0.1% - 0.5% | Transaction value |
| Agent Commission | 3% - 5% | Sale price |
| Vacancy Tax | 6x, 12x, 18x monthly rent | Empty properties (years 1, 2, 3+) |
| Luxury Home Tax | 0.1% - 0.5% | Properties over $400,000 USD |
| Monthly Maintenance | 4-10 million IRR | Standard apartments |
How do property location and type affect tax rates in Iran?
Property taxes and fees in Iran vary significantly depending on whether your property is located in major cities like Tehran, Isfahan, or Mashhad versus smaller municipalities.
Cities with populations over 100,000 residents impose vacancy taxes on empty properties, while smaller towns may not have these requirements. Commercial properties typically face different registration fees compared to residential units.
New buildings attract the highest transfer tax rates at 15% of the transaction value, while existing residential properties are taxed at 5%. Land purchases follow separate taxation rules that may differ from built properties.
The exact municipality matters because local authorities set their own service fees and may have additional requirements for property documentation. Always specify your property's precise location and type when calculating total costs.
What's the difference between purchase price and official assessed value?
Iran's property tax system uses two different valuations: your agreed purchase price and the official assessed value set by local authorities.
The purchase price is what you actually pay the seller and serves as the base for most transaction taxes including transfer duty and stamp duty. The official assessed value is typically lower and used for certain municipal calculations.
For example, if you purchase a property for 100 billion IRR but the tax-assessed value is 78 billion IRR, there's a 28% difference between these amounts. This difference can affect specific tax calculations depending on which base the authority uses.
Both values must be declared during the transaction process, and discrepancies may trigger additional scrutiny from tax authorities. Ensure you understand which value applies to each fee before finalizing your purchase.
Which government taxes apply when buying property in Iran?
Iranian property purchases involve three main government taxes that buyers must pay upfront.
| Tax Type | Rate | Applied To |
|---|---|---|
| Transfer Tax (Existing Properties) | 5% | Transaction value |
| Transfer Tax (New Properties) | 15% | Transaction value |
| Stamp Duty | 0.5% | Transaction value |
| Registration Fee | 0.1% - 0.5% | Transaction value |
| VAT (rare cases) | Varies | Sales value |
Transfer tax represents the largest cost at 5% for existing properties or 15% for brand-new buildings. Stamp duty adds another 0.5% to your total costs. Registration fees range from 0.1% to 0.5% depending on the property type and local authority requirements.
VAT is uncommon for residential properties but may apply in specific commercial transactions. All these taxes are calculated based on the agreed purchase price and must be paid before completing the property transfer.
How much are deed registration and notary fees?
Deed registration fees in Iran range from 0.1% to 0.5% of the transaction value, with the exact percentage depending on your property type and local jurisdiction.
Registration fees are typically structured as a percentage rather than fixed tariffs, meaning higher-value properties pay proportionally more. For a 100 billion IRR property, you'd pay between 100 million IRR (0.1%) to 500 million IRR (0.5%) in registration costs.
Notary fees vary by individual notary and transaction complexity, commonly ranging from 0.1% to 0.5% of the purchase price. Some notaries charge fixed amounts for standard transactions, while others use percentage-based pricing.
These fees cover the legal transfer of ownership, document verification, and official recording with government authorities. Both registration and notary fees are typically paid by the buyer at closing.
What are standard real estate agent commissions in Iran?
Real estate agent commissions in Iran typically range from 3% to 5% of the sale price, with this cost traditionally paid by the seller.
Both buyer's and seller's agents usually receive commissions from the seller's proceeds, though buyers may negotiate separate representation agreements. Commission rates are negotiable and can vary based on property value, market conditions, and agent services provided.
For a 100 billion IRR property transaction, total agent fees would range from 3 billion IRR to 5 billion IRR. High-value properties or complex transactions may justify higher commission rates, while standard residential sales often fall toward the lower end of this range.
Some buyers choose to work directly with sellers to avoid agent fees, but professional representation can provide valuable market knowledge and transaction security. Always clarify who pays commissions before engaging any real estate agent.
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What are the required appraisal and inspection fees?
Property appraisal fees in Iran are mandatory for most transactions and typically cost between 2 million IRR to 5 million IRR for standard residential properties.
Technical inspections are optional but recommended, with fees similar to appraisal costs at 2-5 million IRR. These inspections can identify structural issues, electrical problems, or other property defects before purchase.
Document verification is sometimes included in notary fees but may be charged separately by lawyers or legal professionals. Survey fees apply mainly to land purchases or properties with unclear boundaries.
Luxury properties or complex commercial buildings may require higher appraisal and inspection fees due to their specialized nature. Budget an additional 5-10 million IRR total for these professional services on a standard home purchase.
What mortgage costs should I expect in Iran?
Iranian banks typically charge origination fees of 1% to 3% of the loan amount for mortgage processing.
Additional bank costs include processing fees and property valuation services, often totaling 0.5% to 1% of the property value. Required insurance includes property insurance and mortgage life insurance, with premiums varying widely based on coverage levels.
Total upfront cash needed for a mortgaged purchase typically ranges from 7% to 12% of the purchase price, including down payment, taxes, fees, and mortgage costs. This percentage increases for higher-value properties due to progressive tax rates.
Mortgage availability for foreign buyers may be limited, and terms can differ significantly from domestic buyer options. Consult with multiple Iranian banks to compare mortgage costs and requirements for your specific situation.
Are there annual property or municipal taxes after purchase?
Iran abolished traditional property taxes in 2002, so property owners don't pay annual property taxes based on assessed values.
Municipal service fees vary by city and are billed annually or quarterly, typically ranging from 500,000 IRR to 2 million IRR monthly depending on location and property size. These fees cover local services like waste collection, street maintenance, and municipal administration.
Payment due dates are set by individual municipal authorities, with late payment penalties varying by jurisdiction. Some cities bill these fees with utility statements, while others send separate annual notices.
Land taxes are generally not charged on residential properties, though specific commercial or agricultural land may face different requirements. Always verify current municipal fee structures with your local authority after purchase.
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Do vacancy or luxury property taxes apply in Iran?
Vacancy taxes apply to empty properties in Iranian cities with populations exceeding 100,000 residents, including Tehran, Isfahan, Mashhad, and other major urban centers.
Empty properties are taxed at 6 times the assessed monthly rental value in the first year, 12 times in the second year, and 18 times in the third year and beyond. The vacancy period begins after 4 months of non-occupancy.
Luxury home taxes apply to properties valued above 400,000 USD (approximately 100-150 billion IRR as of September 2025). Tax rates are graduated from 0.1% to 0.5% of the excess value above this threshold.
For example, a 250 billion IRR luxury home would pay approximately 750 million IRR annually in luxury home tax. Both vacancy and luxury taxes represent significant ongoing costs that must be factored into your ownership budget.
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What taxes apply if I rent out my Iranian property?
Rental income in Iran is taxed at rates between 15% to 25% based on income brackets, with a standard 25% deduction allowed for property-related expenses.
Residential properties up to 150 square meters in Tehran or 200 square meters in other cities may qualify for reduced tax rates or exemptions under current law. Larger properties or commercial rentals face full taxation on net rental income.
Annual tax filings are required, with due dates set by the National Tax Administration. Lease stamp fees may apply depending on rental agreement terms and local requirements.
Landlords must maintain records of rental income, allowable expenses, and property maintenance costs for tax calculation purposes. Consider consulting a tax professional to optimize your rental income tax obligations and ensure compliance with current regulations.
What taxes will I pay when selling my Iranian property?
Iran does not impose capital gains taxes on property sales, making it attractive for real estate investors seeking tax-efficient exits.
The main cost when selling is the standard 5% transfer tax applied to the sale price, paid by the buyer in most transactions. No additional taxes apply based on holding periods, property appreciation, or seller profits.
The gain calculation basis is your original purchase price without indexation adjustments for inflation or improvements. Filing and payment deadlines coincide with the property transfer process at the notary office.
This tax-free capital gains environment makes Iranian real estate particularly attractive for long-term investment strategies. However, always verify current tax laws with a local professional as regulations can change.
What ongoing ownership costs should I budget monthly?
Monthly ownership costs for Iranian properties vary significantly based on property type, size, and location.
| Cost Category | Monthly Amount (IRR) | Property Type |
|---|---|---|
| HOA/Building Maintenance | 2-5 million | Standard apartments |
| Municipal Service Fees | 500,000-2 million | All properties |
| Utilities (average) | 1-3 million | Residential units |
| Waste Collection | 150,000-500,000 | All properties |
| Property Insurance | 250,000-1 million | All properties |
| Luxury Property Total | 15+ million | High-end properties |
Standard apartments typically require 4-10 million IRR monthly for all recurring costs, while luxury properties or larger homes may need 15 million IRR or more. These costs increase in premium locations like north Tehran or central Isfahan.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Iranian property investment requires careful attention to all associated taxes and fees, from the substantial 5-15% transfer taxes at purchase to ongoing vacancy and luxury property obligations.
While Iran offers attractive tax-free capital gains on property sales, buyers must budget for significant upfront costs and various annual fees that can substantially impact investment returns.