The tax office draws attention to the taxation of apartment rental and the importance of concluding a rental agreement


Before the peak season of the rental real estate market in August-September, the tax authority drew attention to the tax rules and other details of long-term apartment letting and renting in a statement on Wednesday.

In its announcement, the National Tax and Customs Administration (NAV) highlighted that for years, most people have been looking for houses and apartments to rent during this period. One of the rules of long-term apartment rental is that, in addition to trust in advance, it is also worth recording the rental conditions in writing, they wrote.

It is important that the tenants always have a valid apartment rental contract for the rented apartment, and it is worth documenting the monthly rent payment. It is easiest if tenants pay by bank transfer and indicate the date and the name “rent” in the notification column.

As a general rule, the rental of residential property is VAT-free, and the individual who earns income exclusively from the VAT-free rental of residential property as an economic activity does not need to register with the NAV (have a tax number) or submit a VAT return. The landlord must document the rent, i.e. the income from renting out the apartment.

They also mentioned that the income from the total rental income can be determined in two ways. One option is itemized expense accounting, when income is reduced by verifiable costs (utility bills, renovation costs) and depreciation. The other option is for the landlord to determine his income by deducting a 10 percent expense ratio from the total income.

A tax advance must be paid every quarter on the established income (revenue-cost/cost ratio), and the income must be indicated in the annual tax return as income from independent activities. Only personal income tax must be paid on the income from renting, the tax rate is 15 percent, reads the announcement of the NAV.



Photo: Frank Yvette

Leave a Reply

Your email address will not be published. Required fields are marked *