The Association of Real Estate Companies has announced that it is advocating tax freedom on apartment rental income for private individuals.
Such a change, which the association decided to back after discussing the idea at its October 26 round table, would both stimulate the undersupplied market and drag the rental business out of the grey economy, the organization said in a release. In an article published in rus.err.ee, the association’s board member Tõnu Toompark wrote that Estonia’s rental market is currently in an anomalous situation whereby landlords are required to pay 21 percent income tax on rental income, but cannot deduct associated expenses like repairs and maintenance.
Partly as a result of this quirk, very few landlords actually pay the required tax, choosing instead to keep their rental off the books. Quoting Tax and Customs Board figures, Toompark said that just 2,900 people in Estonia declared rental income last year, but the number of apartments rented out in Tallinn alone might be as high as 30,000.
The statement from the association said that the 10-year tax suspension that it is advocating would bring much-needed transparency to the property rental market as well as encourage more individuals to put their apartments up for rent, thereby alleviating seasonal shortfalls in availability.
Steve Roman http://news.err.ee/economy/01a819cd-02b5-4db1-9cf7-3934062808bd