The Internal Revenue Department (“IRD“) has issued fresh guidance reminding parties to real estate transactions of their tax obligations. Sellers of land, buildings, apartments and other capital assets must comply with Capital Gains Tax (“CGT“) rules, while buyers must be able to substantiate the source of funds used to acquire the property.
The guidance, which follows an earlier 2024 IRD issuance, sets out the procedures, documentation, valuation process and tax obligations for the purchase, transfer, exchange, gift, inheritance and court-ordered transfer of real estate in Myanmar.
Key Highlights:
1. Formal Ownership Registration Required
Ownership should be transferred through formal legal registration, not through informal arrangements such as private agreements or powers of attorney. Buyers should complete registration with the relevant authorities to secure legal ownership.
2. Property Valuation Before Registration
Before registration, the market value of the property (other than agricultural land) must be assessed by the relevant Property Value Assessment Committee. The parties apply to the Township IRD Head’s office in the township where the property is located; for properties within the municipal (development-committee) boundaries of Yangon or Mandalay Region, the application is made instead to the relevant Region’s Market-Value Assessment and Determination Body.
The assessed value serves as the basis for:
- Income tax assessment;
- CGT assessment; and
- Stamp duty calculation.
Where all supporting documents are in order, valuation is typically completed within around two weeks.
3. Documentation Requirements
Required documents vary by transaction type. Commonly required items include:
- National Registration Cards (NRCs) of buyers and sellers;
- Household registration documents (Form 66/6);
- Land ownership documents or land grant;
- Sale and purchase agreement;
- Property photographs;
- Inheritance documents or Power of Attorney (where applicable); and
- Company registration documents and board resolutions for corporate purchasers.
Further documents may be required for gifts, exchanges, court-ordered transfers, condominium transactions and construction projects.
4. Income Tax Obligations
Buyers
Individual and corporate buyers (including those constructing real estate) must provide satisfactory evidence of the source of funds used for the acquisition. Where the source of funds cannot be substantiated, the IRD may assess income tax on the amount as income that has escaped assessment under the prevailing Union Taxation Law. Currently, the tax rates for such undisclosed income range from 3-30%.
Sellers
Sellers of land, buildings, apartments, condominium units and other capital assets may be subject to CGT on gains from the transfer where the total value of capital assets transferred in a financial year exceeds MMK 10 million.
Under the prevailing Union Taxation Law, CGT is generally imposed at 10% of the gain. The gain is the sale consideration less the adjusted cost of the asset (i.e. original purchase cost plus applicable costs of sale or purchase).
5. Stamp Duty
Transfers of land, houses, buildings, apartments and condominium units are generally subject to:
- Stamp Duty: 2%; and
- Additional Stamp Duty: 2%.
A total of 4% of the assessed property value is generally payable on transfers by way of sale, gift, exchange or court order.
6. Exchange Transactions
For property exchanges:
- each party is subject to a separate income tax assessment;
- each party may need to demonstrate the source of funds used to acquire the property exchanged; and
- any balancing payment must be supported by documentation evidencing the source of funds.
7. Registration Following Tax Clearance
After paying the applicable taxes and stamp duties, taxpayers must submit the tax assessment letters, tax clearance certificate, tax payment receipts and duly stamped transfer documents to complete registration.
8. Validity of Property Valuation
A property valuation is valid for one year from issuance. If the transfer is not completed within that period, a fresh valuation at prevailing market value may be required.
DFDL Comments
The IRD guidance offers a clearer roadmap for parties to real estate transactions in Myanmar and reinforces the government’s focus on formal registration and tax compliance. It also underscores the central role of property valuation, which drives the income tax, CGT and stamp duty outcomes of a transfer.
In practice, taxpayers should start preparing supporting documentation early and keep clear records of ownership history and the source of acquisition funds—insufficient evidence on source of funds can create meaningful additional income tax exposure. Stamp duty and other tax costs should be built into transaction planning, and the assessment and registration steps should be completed within the valuation’s one-year validity period to avoid a re-valuation.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
DFDL offers expert Tax & Transfer Pricing solutions across 10 ASEAN jurisdictions. Learn more about our Myanmar office.
