The bonus is increased for long-term rental agreements

The government plans to improve the provision that provides a three-year rental tax exemption for short-term rental properties when transferred to long-term leases.

The original regulation provided for a mandatory prior, short-term rental agreement for three years. According to the information, this provision will be improved and the period of stay on the short-term rental market will be limited to only one year. This means, for example, if you have rented out your property for a short period of time for a year and want to change it and rent it out for the long term, you can receive exemption from income tax.

On the contrary, the Ministry of National Economy and Finance seems to have so far rejected proposals for similar incentives for closed properties to be opened and rented out.

The provision, as reflected in the Ministry’s draft bill, provides for, under certain conditions, a three-year tax exemption for income received by individual owners from the rental of properties reported as vacant or made available for short-term rental.

In the first 36 months after conclusion of the respective rental agreement, income of natural persons from renting apartments of up to 120 square meters is tax-free. However, this exemption no longer applies if the property is vacant within three years of the tax year in which the vacancy occurs. In addition, the tax exemption no longer applies to short-term rentals of the property from the first year of rental.

This is the big problem with closed properties, as the tax exemption is tied to the tenant and not to the property. In other words, if the tenant leaves after two years, the taxpayer loses the tax exemption, even if the property is rented out again immediately. The Federation of Property Owners (POMIDA) points out that “in order not to create complete uncertainty and total abstention from the owners, the 36-month tax exemption must be linked expressly and exclusively to each apartment and not to the person and dispositions of the original tenant should.” .”