Hungary: Worked Example of Tax on Rent
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Tax Example: Rent
| Non-resident couple's joint monthly rental income1 | €1,500 | €6,000 | €12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less: Standard Notional Deduction 2 | 10 % | (1,800) | (7,200) | (14,400) |
| = Taxable Income | €16,200 | €64,800 | €129,600 | |
| Income Tax Rates3 | ||||
| Up to HUF1,700,000 | 18% | 2,462 | 2,462 | 2,462 |
| HUF1,700,001 – HUF6,748,850 | 36% | 908 | 14,621 | 14,621 |
| Over HUF6,748,850 | 40% | - | 4,204 | 30,124 |
| Annual Income Tax Due | €3,370 | €21,287 | €47,207 | |
| Tax Due as % of Gross Income | 18.72% | 29.57% | 32.78% | |
Thanks to: |
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 17, 2007.
Notes
1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).
2 If the taxpayer elects to be taxed at progressive rates, he could either:
- Deduct expenses actually incurred and documented (i.e. lighting, maintenance, administrative costs, etc.), or
- Deduct a 10% notional deduction from the gross income
3 Exchange rate used: €1 = HUF248.621.
NON - RESIDENT COUPLE (ELECTING THE 25% FLAT RATE TAX) |
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| Non-resident couple's joint monthly rental income1 | €1,500 | €6,000 | €12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| = Taxable Income | €18,000 | €72,000 | €144,000 | |
| Income Tax Rates2 | ||||
| Flat Rate | 25% | 4,500 | 18,000 | 36,000 |
| Annual Income Tax Due | €4,500 | €18,000 | €36,000 | |
| Tax Due as % of Gross Income | 25% | 25% | 25% | |
| Thanks to: |
||||
DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 17, 2007.
Notes
1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).
2 Gross income is subject to a flat rate of 25%.
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