property lease tax europe

According to the Deloitte Real Estate Confidence Survey, most real estate companies have a positive outlook for Central Europe properties. Many respondents are confident that the economic climate will remain conducive for growth and that credit financing will not change in the near future. As much as 40% of the respondents believe that Central Europe will see a number of new investment opportunities this year. This makes Central Europe an ideal region for property investments. Read our guide to paying property lease tax in Europe:

Paying Property Lease Tax in Central Europe

Lithuania

Non-Lithuanian residents are required to pay taxes for income sourced in Lithuania. Note that married couples have to pay taxes separately. Property lease tax is 15% flat rate of the gross rental income. 

North Macedonia

Property lease tax has a flat rate of 10%. The government allows depreciation costs expenses related to the property as deductible costs when computing for taxable rental income. Income-generating expenses have a statutory deduction of 25% of gross rent. 

Montenegro

This small Balkan country has one of the lowest taxes in the world, making it a great place to invest in property. Property lease tax in Montenegro is charged with a 9% flat tax rate. Landlords can deduct actual property-related expenses or flat 40% of the gross rental income. 

Poland

All residential properties in Poland that earn a rental income are subject to property lease tax. This is applicable if the owner is a Polish resident or not. Owners of rental properties in the country are required to submit a tax return annually. The Polish tax authorities also require owners to do monthly calculations and payments every 20th of the month. Using the progressive scale method, the payments must reflect the payments and deductibles.

If the cumulative net amounts go beyond the tax-free allowance, the monthly amount must then be multiplied by the tax rate. By the end of the year, the annual tax return will be submitted and this should reflect the monthly payments done for the property lease tax. 

Romania

Romania charges non-residents’ rental income at a flat rate of 16%. There is also a 40% deduction for any income-generating expenses. 

Serbia

Non-Serbian residents are subject to a property lease tax rate of 20%. The rental income is also subject to a provisional 20% withholding tax. Income-generating expenses are also deductible from the total taxable income. 

Slovakia

Slovakia allows foreigners to buy property as long as the buyer has more than three years of business activity and has a temporary residence in the country. 

After deductions, Slovakia property lease tax rate is 19%. Instead of itemizing deductions, the taxpayer can choose to make a general expense claim of up to 40%. Properties can also qualify for depreciation, particularly if it is more than 20 years already. 

Rental properties are also subject to withholding taxes. Landlords with the intent of renting out their properties must register with the Tax Office. Failing to do so will receive a fine of SKK200,000. The landlord must use their permanent residence and not the rental property when registering. 

Slovenia

Slovenia has a property lease tax rate of 25% similar to the tax rate for capital gains, dividends, and interests. 

Read Part 3 of our Guide to Paying Property Lease Tax in Europe

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