Q.1 2021

Data Points

A Selection of AIRINC Research Results

This quarter’s cost of living research was conducted primarily in North America, Central and South America, the Middle East, Africa, and maritime Southeast Asia-Pacific.

Housing Update

Snapshots of expatriate-quality rental markets around the world

Boston MA, U.S.A.

San Juan, Puerto Rico

San Jose, Costa Rica

Libreville, Gabon

Tehran, Iran

Cape Town, South Africa

Abu Dhabi, U.A.E.

Dubai, U.A.E.

Manila, Philippines

Boston MA, U.S.A.

The COVID-19 pandemic caused a downturn in Boston’s apartment rental market while house rents increased as residents moved to the suburbs. Vacancies increased in the city center due to fewer international arrivals. Facing decreased demand, some landlords enticed tenants by lowering rents, paying brokerage fees, or offering first month’s free rent. The market is expected to partially recover over the next year as assignees return to the rental market.

San Juan, Puerto Rico

Demand for apartments dropped in neighborhoods where COVID-19 restrictions closed public beaches and restaurants. This increased demand for rental houses which are in limited supply. Due to a booming sales market, many landlords sold rental houses, further decreasing supply. House rents increased significantly in the popular Guaynabo neighborhood with a large influx of expatriate families.

San Jose, Costa Rica

At the beginning of the COVID-19 pandemic, landlords dropped rents slightly to entice renters. Vacancy rates increased over the last six months, forcing landlords to reduce rents more significantly. This has attracted local renters to high-end units, which are now more affordable due to lack of expatriate demand.

Libreville, Gabon

Rents for high-end units decreased while rents for modest units remained stable. Despite high vacancy rates due to expat departures from the COVID-19 pandemic and stalled or cancelled oil and gas projects, some landlords are hesitant to lower rents.

Tehran, Iran

The COVID-19 pandemic and a weak oil and gas industry increased expatriate departures. Rents for expatriate quality units decreased as there are very few assignee arrivals. Rather than lower rents, some landlords are keeping properties vacant, so the government implemented a “Vacant Property Tax.” Most landlords have found ways around the new tax and keep rents high. Rents for premium units are expected to remain stable into 2022.

Cape Town, South Africa

The COVID-19 pandemic slowed Cape Town’s rental market, causing the lowest rental growth in decades. Vacancy rates increased for larger homes as local national renters downscaled to smaller and cheaper properties to weather the economic storm. Some landlords are converting their holiday homes into long-term rental units, further increasing rental supply. The rental market is expected to remain fairly stable as worldwide vaccination progresses.

Abu Dhabi, U.A.E.

The COVID-19 Pandemic has slowed Abu Dhabi’s rental market. While there have been few departures, Abu Dhabi’s strict quarantine policy discouraged international arrivals, decreasing demand in certain neighborhoods. Local residents have been relocating within the city to larger villas, which has maintained demand for these homes. The market is bottoming out and rents are expected to stabilize in the latter part of 2021.

Dubai, U.A.E.

Dubai experienced decreased rent in the beginning of COVID-19 but has seen varying levels of recovery during the second wave. There is strong demand but limited supply of villas. Apartments in less desirable neighborhoods have seen lowered demand and large vacancy increases. With few expatriate arrivals, vacancies increased overall. Dubai’s rental market is heavily reliant on expatriates and will not recover until mobility restrictions are lifted.

Manila, Philippines

Rents decreased since the beginning of the COVID-19 pandemic and tenants have gained more negotiating power. With few expatriate arrivals, most rental market activity has been from local renters. Tenants are refusing to commit to 12-month leases, forcing landlords to shorten contracts to 7 months. Most neighborhoods have seen decreased demand and increased supply. Once mobility restrictions are lifted, Manila’s expatriate rental market is expected to recover.

Goods and Services Update

Highlights from AIRINC’s in-depth research
Oman Excise Taxes and VAT

Oman Excise Taxes and VAT

On June 15th, 2019, Oman introduced excise taxes to tobacco products, carbonated drinks, energy drinks, and alcohol and pork products. Carbonated drinks (except for unflavored carbonated water) were taxed at a rate of 50%, while the other items were taxed at a rate of 100%. However, immediately after the introduction of the excise taxes, the rate on alcohol was temporarily reduced to 50%. Initially the reduction in excise tax was intended to last for 6 months, but the excise tax remained at the 50% rate until July 1st, 2020 when it was increased to the full 100%. Additionally, the scope of the excise taxes was expanded on October 1st, 2020 to include sugar sweetened beverages taxed at a rate of 50%. AIRINC’s February survey of Muscat found high inflation to alcohol product and some drink prices due to these tax increases.

Oman will also implement a 5% Value Added Tax (VAT) effective from April 16th, 2021. Oman will be the fourth country to adopt the Gulf Cooperation Council (GCC) VAT after Saudi Arabia, U.A.E., and Bahrain. The VAT will apply to most goods and services within Oman, although there are zero rated or exempt items. AIRINC will survey Muscat this August to capture the VAT impact.

Goods and Services Inflation

Selected locations with inflation higher than 5% for 6 months

Selected 3-month Exchange Rate fluctuations of more than 5%


Currency: SDG

Change vs EUR: -85.3%

Change vs USD: -85.5%


Currency: LYD

Change vs EUR: -69.7%

Change vs USD: -70.0%


Currency: VES

Change vs EUR: -38.9%

Change vs USD: -39.6%


Currency: IQD

Change vs EUR: -19.1%

Change vs USD: -20.1%


Currency: HTG

Change vs EUR: -8.9%

Change vs USD: 9.9%


Currency: ARS

Change vs EUR: -8.6%

Change vs USD: -9.7%


Currency: BRL

Change vs EUR: -7.5%

Change vs USD: -8.6%

Sri Lanka

Currency: LKR

Change vs EUR: -4.3%

Change vs USD: -5.1%


Currency: ETB

Change vs EUR: -3.9%

Change vs USD: -5.2%


Currency: NOK

Change vs EUR: 5.0%

Change vs USD: 3.8%

United Kingdom

Currency: GBP

Change vs EUR: 5.6%

Change vs USD: 4.3%


Currency: TRY

Change vs EUR: 5.8%

Change vs USD: 4.5%


Currency: AOA

Change vs EUR: 6.6%

Change vs USD: 5.3%


Currency: PYG

Change vs EUR: 7.1%

Change vs USD: 5.9%

Tax Update

Changes in expatriate tax








Effective January 1, 2021, state health insurance contributions are mandatory for all employees and employers. The contribution for public sector and oil industry employees is 2% up to annual income of AZN 96,000, plus 0.5% on income exceeding AZN 96,000. The contribution for private sector and non-oil industries is 1% (2% from 2022) up to annual income of AZN 96,000, plus 0.5% on income exceeding AZN 96,000. In addition, social security contributions are no longer deductible for income tax purposes. The net effect is an increase in social security and income tax for most taxpayers.


Czechia implemented major tax reform for 2021. The tax base for taxation of employment income changed, repealing the concept of ‘super-gross’ salary. This ‘super-gross’ taxable salary included employer-paid social taxes as taxable income to the employee. Beginning with 2021, the tax base is now generally gross employment income. The 7% solidarity surcharge was also abolished, and progressive tax brackets were implemented with two tax rates of 15% and 23%. The annual personal tax credit increased by CSK 3,000. Personal credits for a dependent spouse and children are unchanged. The wage base for social security pension contributions increased. The net effect is a reduction in tax for most taxpayers and a small increase in social security for higher incomes.


The solidarity surcharge formula was adjusted and an estimated 90% of German taxpayers will no longer pay it, according to the Federal Minister of Finance. The remaining taxpayers will either see a decrease or pay the same amount. Social security rates and maximums changed slightly. Rate and maximums for insurance deductions and lump sum pension deductions also changed slightly. The tax rate formulas were indexed for inflation. Family allowances increased slightly. The net effect is a decrease in tax and a small increase in social security for most taxpayers.


In response to COVID-19, the Indonesian Government provided relief to companies for the period of August 2020 – January 2021. The relief was in the form of a 99% reduction in the monthly employer contributions for both work accident insurance (JKK) and death insurance (JKM). Employer contributions to these schemes are taxable to the employee. The relief has now lapsed, which in effect increases income tax for employees.

In addition, the monthly wage base for pension security increased. Tax rates, brackets, business expense deduction, and personal allowances are unchanged. The net effect is an increase in social security and income tax for all taxpayers.


The Universal Social Charge schedule was adjusted slightly. The net effect is a nominal decrease in tax for most taxpayers. Separately, the requirements for employers to withhold taxes on foreign employees were substantially reduced. The key changes are:

  • When counting the number of workdays, each year is considered on a stand-alone basis
  • Exemption from the PAYE requirement is based on the provisions of the employment article of Double Tax Agreements
  • The legal relationship between the employee and employer will be considered


Russia has historically imposed a flat 13% tax rate but, beginning 2021, a progressive schedule was introduced with two rates: 13% and 15%. The top rate applies to income exceeding RUB 5 million. The net effect is an increase in tax for higher income taxpayers.

United States Tax Update

At the Federal level for 2021, there were inflation-indexing adjustments to tax brackets and the standard deduction. There is an increase in the social security wage base.

Notable state tax developments


Proposition 208 (Invest in Education Act) passed. This imposes a 3.5% surcharge on taxable income exceeding $250,000 (single) and $500,000 (joint).


The top rate was reduced from 6.9% to 5.9%. There is a draft proposal to further reduce the top rate to 5.5% over the next two years, and the governor has repeatedly emphasized a goal of eventually reducing the top rate to 5%.


Proposition 116 passed, permanently reducing the flat rate from 4.63% to 4.55%, retroactive to January 1, 2020. Colorado taxpayers previously enjoyed a temporary 4.5% rate due to a budget surplus under the Taxpayer Bill of Rights.

New Jersey

The top tax rate of 10.75% is now assessed on income exceeding $1 million, down from $5 million. Separately, eligible taxpayers with children are entitled a rebate of the lesser of actual NJ tax paid, or $500.


The Multnomah County (Oregon) Measure 26-214 passed. This institutes a new tax effective January 1, 2021 of 1.5% on taxable income exceeding $125,000 (single) and $200,000 (joint), plus an additional 1.5% on taxable income exceeding $250,000 (single) and $400,000 (joint). The new bottom rate is scheduled to increase to 2.3% in 2026. Multnomah County, Oregon’s most populous county, includes the city of Portland.

For more information, please see our blog post on COVID-19 tax updates.

Research Location Update

Q.1 Researched Locations and Upcoming Q.2 Locations

AIRINC researches more than 150 locations each quarter.

Q.1 Researched Locations
Q.2 Upcoming Locations

In response to market volatility, we will also conduct updates in Buenos Aires and Caracas in the second quarter.

Make quicker decisions with access to country/city reports for education costs, tax implications, transportation information, and assignment location summaries.

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