Global Property Guide

Financial Information for the Residential Property Buyer


Tax Example: Rent

Last Updated: January 19, 2015

 
Non-resident couple´s joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income 18,000 72,000 144,000
Less: Costs (9,000)2 (10,260)3 (16,020)3
Less: Depreciation4   (32,400) (64,800)
= Taxable Income 9,000 29,340 63,180
Income Tax Rates
Tax Rate of 20% 4 1,800 5,868 12,636
Annual Income Tax Due €1,800 €5,868 €12,636
Tax Due as % of Gross Income 10.00% 8.15% 8.78%
Thanks to:
Anthony & Cie

Notes


1 The property is jointly owned by husband and wife. The property is assumed to be unfurnished for tax purposes (furnished properties are subject to a different taxation scheme).

2 The micro-BIC assessment can be utilized if the rental income does not exceed €32,000. This also allows offsetting 50% of the gross income as expenses and depreciation. This assessment is applied in the first case.

3 In this case, the micro-BIC assessment does not apply because the rental income exceeds €32,000. Therefore, the costs are estimated values.

4 Depreciation expenses are deductible when calculating taxable income. Estimated values.

5 The minimum income tax rate for non-residents is 20%.

     

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