Landlords who rent out closed properties or transfer them from short-term rental to long-term rental, they will be able be exempt from paying tax on income received. This exemption will be reflected in the tax return for 2025.
Thus exemption from tax on closed real estate represents respite for landlordswho have decided to rent out their property for long-term rent. Complete income tax exemption income received from rental housing will be valid for first 36 months after the month in which the lease was concluded for properties falling under the following two categories.
Tax exemption conditions
The conditions for tax exemption are:
- maximum housing area 120 sq. m,
- lease with a three-year contract period for use as housing,
- timely submission of information and income tax returns to AADE.
How does the tax zeroing mechanism work?
The full exemption from personal income tax arising from the rental of residential property will be valid for the first 36 months following the month in which the residential property was rented out. However, the following conditions must be met:
- housing should have a maximum area 120 m² or less
- housing must be rented for a contractual period three years for use as a living space,
- compliance with the requirements of the law must be carried out only by timely provision of information and income statements,
- the home must be declared in the form E2 income statements as a property not owned by the owner;
- it SHOULD NOT BE stated in forms E1 And E2 income statements for tax years 2022 and 2023 and for 2024 if leased in 2025 as a rental property;
- no information declarations regarding other rental properties have been filed in AADE per year of lease and before the start of the lease.
Requirements for housing that was provided for short-term rental
- housing must be legally and exclusively alienated for short-term rentals in 2023 or in 2024 tax year if the lease agreement was concluded in 2025 G.,
- concluded short-term rental agreements must be reported to the tax service,
- submit a short-term rental declaration in the year the lease agreement is concluded and before it begins.
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