Tax Example: Rent

Taxation Researcher | October 16, 2017

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 (4% notional yield)2 8,0503 53,0924 126,6655
Income Tax Rates6
Flat Rate 30% 2,415 15,927 38,000
Annual Income Tax Due €2,415 €15,927 €38,000
Tax Due as % of Gross Income 13.42% 22.12% 26.39%
Source:
Global Property Guide research

Notes


1 The property is jointly owned by husband and wife.

2 Exchange rate used: 1.00 EUR = 1.00 EUR

3 For income from investments, the tax is levied on the demed notional yield of the investment. For 2017, there is an allowable deduction of €25,000 for each individual, or €50,000 for a married couple.

DEEMED YIELD OF ASSETS FOR TAXATION 2017

Asset Value, € Deemed Yield
Up to €75,000 2.87%
€75,000 - €975,000 4.60%
Over €975,000 5.39%
Source: Global Property Guide

3-1 The property is valued at €225,000, and there is a deduction of €50,000. (€225,000 - €50,000) * 4.60% notional yield = €8,050

3-2 The property is valued at €1,035,000, and there is a deduction of €50,000. (€1,035,000 - €50,000) * 5.39% notional yield = €53,091.50

3-3 The property is valued at €2,400,000, and there is a deduction of €50,000. (€2,400,000 - €50,000) * 5.39% notional yield = €126,665

4 The tax is levied at a flat rate of 30% on the calculated notional yield.

 

Comments

Vivien | March 08, 2016

That is very useful.

Ante | May 18, 2016

Indeed thanks for helping us.

SINISA | November 06, 2016

I am a new property owner. Please let me know how and where do I pay tax on rent. Living abroad. Thank you!

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