As the tax inspector’s auto-informer on the hotline says, if you received any income subject to personal income tax last year, do not forget to report and pay it. Owners of rental properties are also subject to these rules. Today we will figure out whether it is necessary to pay tax on renting out an apartment and how to save on it.
Do I need to pay tax on renting out an apartment?
In this article, the words “hiring” and “renting” an apartment are used as synonyms, although it is legally correct to say “renting an apartment”, as required by Chapter 35 of the Civil Code of the Russian Federation. Regardless of what it is called in the contract, the owner must pay tax to the budget on the lease. This is stated in the Tax Code.
When renting an apartment, only compensation for utilities is not subject to tax. The rest of the homeowner’s remuneration falls under the tax regime he has chosen. If you don’t pay the tax on renting out an apartment, the tax office will charge additional fines and penalties.
If the apartment rental agreement is for 11 months
Many people specify in the papers a lease period of 11 months or less, supposedly this will help to legally avoid tax. In fact, it does not matter for what period the contract is signed - the very fact of receiving a lease at least once already legally entails the need to report to the Federal Tax Service and pay tax to the treasury.
A contract term of less than a year affects only the need to register it with Rosreestr, but not taxes. Rentals under 1 year do not need to be registered.
What is an apartment from the point of view of the law?
According to the law, there are residential premises and there are non-residential ones.
Residential - these are apartments, private houses, rooms and their parts. People live in living quarters - they eat, sleep, wash, and read books in the evenings. These are the provisions from Art. 16 and 17 of the Housing Code of the Russian Federation.
The mark that this premises is residential is in the Certificate of Ownership and an extract from the Unified Register of Rights to Real Estate.
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