Taxes payable by persons renting real estates

Obligation to register, tax number

If a person in Hungary leases out property within the framework of an activity in compliance with the Act of VAT, this activity may be pursued as of August 16, 2010 without a tax number.

Value Added Tax

As a rule, the let of immovable properties, with the statutory exceptions, qualifies as a VAT-exempt activity, which means that the lessor shall not pay VAT on this activity. However, the lessor does not have the right of VAT deduction, either.

In terms of VAT exempt let, the taxable person has the right, subject to the prior notification of the Tax Authority, to opt for VAT taxation (which, in turn, means that he also has a right of VAT deduction). Opting for VAT taxation may, depending on the taxpayer’s decision, pertain to all types of immovable properties that are being let or only to a restricted scope of such properties: immovable properties other than residential buildings. If a taxable person made his choice, it will bind him until the end of the fifth calendar year following the year of this choice. In this case, the private person concerned shall register with the tax authority through form “T101” and apply for a tax number.

Personal income tax liability

In case of real estate property not considered to be arable land, the income of the private individual generated by renting the property.

The rate of tax shall be 16% of the tax base.

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BSPL Könyvelőiroda

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