Rental tax

Rental tax — basics

Rental tax depends on the taxation form and whether the rental is private or part of a business. Lump‑sum rules, record‑keeping and payment deadlines matter most.

Private rental vs business

Private rental is typically settled via lump‑sum. When rental is part of business activity, the tax scale or other regimes may apply, with cost deductions available.

Lump‑sum vs tax scale

Lump‑sum means tax on revenue (no costs). The tax scale allows cost deductions but requires different records and settlements. The choice affects net results.

How to choose the tax form

In practice it depends on your cost structure and scale of rental. If costs are high (repairs, interest, furnishings), general rules may be more favorable. With low costs, lump‑sum is simpler and often cheaper.

Rates and thresholds

Lump‑sum rates depend on revenue thresholds. Always check current rates and thresholds for the given year.

Tax obligation and timing

Tax arises when rental income is received. Real cash inflow matters, not only the contract date or invoice.

Deposit and utility charges

A security deposit is generally not income until it is retained. For utility charges, it matters whether they are treated as your revenue or only passed through — make this explicit in the contract.

Deductible costs

Under lump‑sum, costs are not deductible. In business rental, costs (repairs, equipment, interest) may reduce tax.

Records and documents — checklist

• rental agreement and annexes,
• proof of rent inflows,
• revenue register (for lump‑sum),
• cost documents (if you settle within business activity),
• utility charges evidence where relevant.

Deadlines and formalities

You typically need:

• revenue records,
• timely advances,
• annual settlement (e.g., PIT‑28).

Co‑ownership and special leases

With multiple owners, revenue is shared proportionally. Occasional or institutional leases may require extra formalities.

Occasional and institutional lease — documents

These forms usually require additional statements and attachments, plus clear identification of the parties and the premises. Requirements can change, so verify the current list before signing.

Utilities and administrative charges

If charges are only passed through to the tenant, they may not be treated as revenue. If you collect them as part of rent, they can increase the taxable base. Make it explicit in the contract and invoices.

Mini timeline

• start of rental → set up records and archiving of payments,
• during the year → pay advances under your chosen regime,
• year end → file the appropriate annual return (e.g., PIT‑28).

Short‑term rental and VAT

If the rental is service‑like (e.g., short‑term), additional obligations may apply, including VAT. Verify whether your model falls under hospitality‑type services.

Example

Compare net result under lump‑sum versus cost‑based settlement. Lower rates may win, but high costs can make business settlement more favorable.

Short scenario

You rent one flat with stable income and low costs — lump‑sum may be efficient. If you plan major renovation or have high financing costs, compare with the tax scale.

Common mistakes

• missing records,
• confusing tax forms,
• ignoring thresholds,
• late advances,
• no proof of income.

When to consult

If you have multiple properties, co‑ownership or significant costs, consult the choice of taxation and settlement method.

See also: Instalment vs rent and Rent vs mortgage.