Your tax-free allowance as a landlord depends on the type of rental.
When do you have a tax-free allowance?
You typically have a tax-free allowance if you rent out part of your own home while living there yourself.
This applies to, for example:
- Renting out a room in your own home.
- Short-term rental of part of your primary residence while you are still living there.
When do you not have a tax-free allowance?
You generally do not have a tax-free allowance if you rent out a property that you do not live in yourself.
This applies to, for example:
- Investment properties.
- Apartments purchased for the purpose of renting them out.
In these cases, the rental income is taxed according to accounting rules, where income is offset against deductible expenses such as:
- Interest
- Maintenance
- Operating costs
Tax calculation for rentals without a tax-free allowance
When you do not have a tax-free allowance, calculating your tax requires a total summary of income and expenses. This can be administratively complex, as the deductions and calculation methods depend on the specific type of rental.
Calculating tax on residential rentals
Reportability is a tool that helps landlords calculate tax on residential rentals.
The tool:
- guides you through the necessary information
- calculates the result automatically
- shows you how to report it correctly to the tax authorities
