Taxation while renting a house

Posted: August 17th, 2013 | Author: | Money

Although a lot of people rent flats spontaneously it is good if both parties want to know what to rent and they sign a lease agreement. If we do it, the landlord will have the material advantages that will be taxed by the State.

Unitopia / photo on flickr

Unitopia / photo on flickr

Sometimes, the related costs are passed on to the tenant, but let’s discuss the situation when we have to pay the tax. There are two ways. The first is the ordinary income taxation that still concerns us. Its advantage is that it can be tax-deductible business expenses, or any kind of costs associated with home maintenance, taxes, etc. However, the overhaul aimed at raising the standard or any other upgrade will not be treated as an expense.

The big problem is that it allows us to such proceeds as to catch the second tax bracket, and these are significant costs and, unfortunately, but a very large percentage of us passes between the toes. Another way of a lump sum tax on registered income, which is 8.5% of total revenue, so any costs to get are knocked out. However, it is often more cost-effective option. Best is to take a calculator to hand, and calculate everything carefully before making a decision.

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