The Verkhovna Rada reduced taxes for property owners to legalize rentals – 5% instead of 18%
The Verkhovna Rada adopted bill No. 15111-d, which also provides for a reduction in the personal income tax rate for citizens who officially rent out real estate.
It should be noted that the parliament supported automatic data exchange on income from digital platforms. This concerns bill 15111-d. Now services will automatically share information about their users' income with the tax authorities. Also, alcohol online will be sold only through "Diia".
As reported by the Verkhovna Rada Committee on State Building, Local Governance, Regional Development, and Urban Planning, the tax burden for landlords will be reduced from 18% to 5%. The new rate will take effect from January 1, 2027.
At the same time, it is necessary to consider that:
- an additional 5% military tax will be paid;
- the owner loses the property tax exemption (60 sq. m for an apartment and 120 sq. m for a house).
It is well known that currently a significant number of property owners rent out real estate without official contracts and income declaration. One of the reasons for this, according to parliament, is the high tax burden.
It is expected that reducing the rate to 5% will encourage the rental market to come out of the shadows, promote the conclusion of official contracts, and increase the level of tax discipline.
Such income will also need to be reported in the annual tax declaration, without indicating other incomes from which tax has already been paid and information about which is already available to the tax authorities.
The committee emphasizes that legalizing the rental market should benefit all parties: landlords will get simpler rules, tenants — greater protection of rights, and the state — additional and more predictable budget revenues.
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