If you let out your flat as a private individual, the rent is income, and you have to pay tax on it. The basics are simple, and with a bit of routine, the year-end tax return won't give you a headache either.
How much is the tax?
You pay 15% personal income tax (szja) on income from letting a flat. It counts as income from independent activity, and other amounts the tenant pays you along with the rent may also count. In some cases other public charges may apply too; your accountant can give you the exact answer on that as well.
The deposit isn't income as long as it's due back to the tenant. Utilities the tenant reimburses based on the providers' bills usually aren't income either, but if you charge a flat fee and it's more than the actual cost, the difference can count as income. It's worth checking with your accountant what's right in your case.
Two ways to calculate
- 10% flat-rate cost deduction: you deduct 10% of the income without proof and pay tax on the rest.
- Itemised expenses: you deduct the costs you actually paid and can prove with invoices, such as repairs.
If you spend little on the flat, the flat-rate deduction is simpler. In a year with a bigger renovation, itemising can be worth more.
A simple example
At HUF 250,000 a month, your income for the year is HUF 3,000,000.
- With the flat-rate deduction: after deducting 10%, i.e. HUF 300,000, you pay 15% on HUF 2,700,000, which is HUF 405,000.
- Itemised: if you had HUF 600,000 in costs backed by invoices that year, you pay 15% on HUF 2,400,000, which is HUF 360,000.
The example is for illustration only. Go through exactly what can and can't be deducted with your accountant.
What can you itemise?
Generally, expenses directly related to letting the flat and backed by invoices: repairs, maintenance, running costs of the flat not reimbursed by the tenant, advertising fees, the property manager's fee. Under certain conditions, depreciation can also be deducted. To itemise, every invoice must be issued in your own name, and you must keep them.
When do you pay?
You pay a tax advance every quarter, by the 12th of the month after the quarter, and settle up in your annual personal income tax return. The tax authority (NAV) prepares a draft return, but you have to add or check the income from letting.
It's worth setting the tax aside as soon as the rent arrives. That way, on the advance payment date, it doesn't come out of your monthly budget.
Short-term letting follows different rules
The rules above apply to long-term rentals. If you let the flat for days or weeks, for example to tourists, that counts as providing accommodation (szálláshely-szolgáltatás), which has its own registration, reporting and tax rules. If you're thinking about this, look into it first or ask an accountant.
What about the deposit?
The deposit is a security, not rent. But if you keep a deduction from it, for example for unpaid rent, that can be income. Ask your accountant how to handle it.
Keep your paperwork in order
Keep every payment and invoice in one place. A clean monthly utility settlement helps a lot here too. If you let several flats, track income and costs separately for each flat, so at year-end you don't have to dig around to see which invoice belongs where.
What to keep:
- the lease and any amendments,
- bank statements showing the rent received,
- invoices for costs in your own name,
- documents on receiving and returning the deposit.
FAQ
Do I need a tax number to let my flat?
As a private individual letting long-term, usually not; your tax identification number (adóazonosító jel) is enough. If you'd let as a business, or you have many flats, ask your accountant which setup is better for you.
What if the tenant didn't pay, but I still have to pay tax?
As a rule, you pay personal income tax on the income you actually received. If the rent didn't arrive in a given month, ask your accountant about it.
Can I report it retroactively if I haven't so far?
Yes, through a self-revision (önellenőrzés). The sooner you sort it out, the smaller the surcharge.
Rentkey
In Rentkey, payments and costs are kept in one place for each flat. At year-end, you can see from there how much income and how much cost you had on each flat.
