Flat-rate tax on flat rentals

When renting out a flat privately, we can choose one of two forms of tax settlement – the flat rate or settlement under the tax scale. Find out whether the flat-rate tax on flat rentals will remain an option available to all interested property owners. Learn about the tax changes ahead.

Current forms of tax settlement

At present we can choose the form of tax settlement on property rental ourselves. Current legislation does not regulate this matter, leaving the choice of a convenient form of settlement entirely to the property owners.

Under the general rules, i.e. the tax scale, the tax rate is 18% or 32%. This depends on the profit received from renting out the residential premises. The first tax threshold applies to people whose income did not exceed 85,000 PLN a year. If this amount is exceeded, the higher tax scale rate of 32% is applied.

The settlement form mentioned earlier is advantageous for owners of premises because it allows the costs of maintaining the property to be deducted. These include all repairs, renovations and charges such as the service charge (czynsz) for the flat. The flat-rate tax does not offer this possibility. Its rate, however, is considerably lower, at 8.5%. Statistics show that the number of landlords who choose to settle by the flat rate is steadily rising.

Flat-rate tax on flat rentals – who can choose it?

At the moment the flat-rate tax on flat rentals is a form available to everyone. The cost of obtaining rental income is not a condition at all.

It should be borne in mind that the Ministry of Finance has announced major changes that will apply from 1 January 2019. For people with a small income from renting out property, the tax conditions will not change. People earning higher amounts from this source will lose the option of settling tax by the flat rate.

According to the Ministry's announcements, the income limit for a landlord will be 100,000 PLN a year. The amount applies to all of the landlord's properties. The limit will be exceeded by people who earn more than 8,000 PLN a month from such activity. If we rent out four premises (studio flats) for 2,100 PLN each, we too will have to give up the flat rate.

INCOME TAX PAID TO THE TAX OFFICE ON FLAT RENTALS – FIND OUT MORE

The changes described are reportedly to be introduced from 1 January 2019. They therefore do not apply to the current year. It is worth keeping track, however, of changes related to the tax settlement of flat rentals.

Would you like to find out more about tax settlements related to renting out or selling a property? Contact the specialists at REMAX Gold and get the information you need!

SEE FLATS TO RENT IN CHORZÓW