Many real estate owners who rent out an apartment or business premises often ask themselves: why is the rental tax calculated at 10.5% and not 15%, as stated in the law?
The answer lies in the method of tax calculation and in the law on personal income tax itself.
Basic tax rate is 15%
The law prescribes that the income from the sale of real estate is taxed at the rate of 15%.
However, this does not mean that this 15% is calculated directly on the total amount of the lease (rent). Instead, the tax is calculated on the so-called tax base.
What is the tax base?
The tax base is the amount from which the tax is calculated, and in the case of real estate issuance, it is determined by:
take the total rent,
30% of standard depreciation costs are deducted from it.
In other words, the law recognizes that every real estate is rapidly depreciated when it is rented out (walls, floors, installations, furniture, appliances), so 30% of the depreciation cost is automatically included immediately – even if the owner has no evidence of these costs.
Why exactly 30%?
The creators of the tax policy had in mind the reality of the market: every real estate that is used loses its value over time and requires additional investments.
Instead of each owner collecting bills and proving exactly how much they spend on maintenance and depreciation, the law simplified the procedure and introduced a standard rate of 30%.
Of course, if the owner can prove that his expenses are higher than 30%, the basis can be further reduced.
What does the calculation look like in practice?
Example:
monthly rent = 1,000 EUR
standard depreciation costs (30%) = 300 EUR
tax base = 1,000 – 300 = 700 EUR
tax 15% on the basis = 105 EUR
Therefore, although the tax rate is 15%, due to the reduction of the base, the effective rate is 10.5% of the total amount of rent.
What does this mean for property owners?
Your real tax is never 15% of the full rent, but an effective 10.5%.
The law automatically recognizes 30% of the cost, without you having to prove it.
If you have proof that your expenses are even higher (eg renovation, adaptation, repairs), the tax base can be further reduced, so the tax will be lower.
Conclusion
Real estate rental tax seems simple, but it is important to know that 15% is calculated on a reduced basis.
Thanks to the recognized 30% standard depreciation expense, the effective tax rate is 10.5%.
In this way, the legislator tried to protect the owners and recognize the real costs arising from the use and consumption of real estate.
If you’re planning to rent, keep this calculator in mind – it helps you accurately calculate how much you really have left over from each rent and meet your tax obligations on time.
