What Is Immovable Property?
Immovable Property is a tax-treaty and property-law category covering land, buildings and attached rights, with the precise meaning set by national law where situated.
Also known as: Real Property, Real Estate.
How Immovable Property works
Immovable Property is land and assets legally attached to land, and under Article 6 of the UN and OECD model conventions the country where the property is situated may tax income from using, renting or exploiting it, whatever the owner's residence. The term takes its meaning from the law of the situs country, and the UN Model expressly includes agricultural livestock and equipment, usufruct and certain resource rights while excluding ships and aircraft. The owner's residence country generally relieves resulting double taxation through exemption or credit, and gains on sale are typically addressed separately under the treaty's capital gains article.
Immovable Property vs Movable Property
Unlike Movable Property, such as shares or equipment, Immovable Property is fixed to a location, so treaties generally give the situs country a first right to tax income from it.
Example
Illustrative example: A freelancer resident in Country A rents out an apartment located in Country B. Under a treaty following Article 6, Country B may tax the rental income, while Country A taxes worldwide income but generally grants a credit or exemption for the tax paid in Country B.
Common misconception
Myth: Moving abroad ends tax obligations on a rented-out home left behind.
Reality: Immovable Property income generally remains taxable in the country where the property is situated, regardless of where the owner becomes resident.
Frequently asked questions
Where is rental income from property abroad taxed?
Rental income from Immovable Property is generally taxable first in the country where the property is located, with the owner's residence country relieving double taxation by exemption or credit under the applicable treaty.
Are ships and aircraft immovable property?
Ships and aircraft are not Immovable Property under Article 6 of the UN Model Convention, which expressly excludes them even where national property law treats them differently.
Related terms
- Source Taxation — Situs country taxes property income first
- Non-Resident Landlord Scheme — UK regime for non-resident rental income
- Foreign Investment in Real Property Tax Act (FIRPTA) — US rules on foreign-owned real property sales
- Double Tax Treaty (DTT) — Contains the immovable property article
Related guides
- Tax treaties and international taxation — How treaty articles allocate taxing rights
Sources
Last verified: 2026-10-08. This entry is general information, not tax or legal advice; rules vary by country and change over time.
