When leasing real estate, the lessor who receives revenue from this activity must also pay taxes and fees according to state regulations. The level of tax and fees for real estate rental will depend on each level of revenue. Below, Viet My will explore the detailed regulations on declaring personal real estate rental tax in the article below.

1. When must real estate rental tax be declared?

The declaration of real estate rental tax will be declared for each payment period (each payment period is determined by the starting time of the rental period of each payment period according to the real estate rental contract) or by calendar year.

In case an individual authorizes an organization to declare real estate rental tax, the declaration will be made monthly or quarterly or each time a payment period occurs or by calendar year according to the provisions of the law on tax management.

Thus, it can be seen that individuals who rent out real estate must declare taxes regularly for each payment period or for each calendar year. If they meet the tax conditions, they must pay tax at the required rate. If the revenue is not subject to tax, they do not need to pay tax.

2. How to calculate personal real estate rental tax

Calculating personal real estate rental tax will be calculated according to the following types of taxes:

2.1 Calculating real estate rental business tax

Business license tax is a fixed tax rate for individuals or households engaged in the production and trading of goods and services, individuals leasing real estate is a business activity with annual revenue. Specifically, business license tax is divided into 3 detailed levels below. This is the first tax to be paid when leasing real estate.

Taxpayers should base on actual revenue to calculate tax, determine which fee level they are at.

• For revenue from 100 million to 300 million VND, the business license fee is 300,000 VND.
• For revenue from 300 million to 500 million VND, the business license fee is 500,000 VND.
• With a turnover of over 500 million VND, the business license fee is 1 million VND.

It can be seen that with the business license tax, if the turnover is over 100 million VND in a calendar year, the business license tax must be paid for the year with turnover above the prescribed level.

The revenue level used as a basis for determining the business license fee for individuals with revenue from real estate leasing will be specifically regulated as follows:

• First is the total revenue from multiple contracts at one location in a tax year;
• Second is the total revenue from multiple contracts at multiple locations in a tax year (ie including multiple different locations of an individual lessor)

The subject of declaring real estate rental tax should base on the taxable revenue to pay the correct business license fee.

2.2. Calculating Personal Income Tax for Real Estate Rentals

This is the second type of tax that individuals who rent out real estate must pay. Specifically, individuals with an income of over VND 11,000,000/month after deducting tax exemptions are required to pay personal income tax. The calculation of personal income tax for individuals who rent out real estate is calculated according to the following formula:

Personal income tax payable = Taxable income x 5%;

2.3 Calculating VAT for real estate rentals

Real estate rental activities are subject to a VAT rate of 5%. The calculation of VAT is as follows:

VAT payable = Taxable income x 5%.

Thus, the tax rate payable when declaring real estate rental tax has the following general formula:

Tax rate payable = Taxable income x 10% + business license tax.

However, with the above taxes, it is necessary to base on the actual taxable revenue as prescribed by law to start calculating taxes. With a revenue of 100 million per year, taxes will start to be calculated.

3. Determining taxable revenue from property rental

The basis for determining taxable revenue is very important, this is the basis for determining whether the property lessor has to pay tax or not. Below are the cases for determining taxable revenue:

– In case an individual leasing real estate does not generate revenue for 12 months in a calendar year and the average monthly revenue is VND 8.34 million or less, he/she is not required to declare tax;

– In case an individual leasing real estate does not generate revenue for 12 months in a calendar year and the average monthly revenue is over VND 8.34 million, the individual must declare and pay tax in the year, including the case where the individual chooses to declare tax annually and submits the tax declaration before December 31 of the tax year;

– For individuals who choose to declare tax annually, submitting tax declaration documents after December 31 of the tax year will not be required to pay tax if the actual total revenue from real estate leasing activities is VND 100 million or less.

– In case of having paid tax during the year, at the end of the year, the individual self-determines that the revenue in the year is VND 100 million or less, he/she must prove and request to process a refund or offset against the tax payable arising in the following period according to the provisions of the law on tax administration.

– In case the lessee pays in advance for many years, the individual leasing the real estate must declare and pay tax at one time for the entire prepaid revenue. The amount of tax payable at one time is the total amount of tax payable for each calendar year according to the provisions of the law.

– If there is a change in the content of the real estate lease contract leading to a change in taxable revenue and payment period, the individual shall make an adjustment and supplementary declaration according to the provisions of the Law on Tax Administration for the change.

Thus, individuals with revenue from real estate rentals calculated in a calendar year (from January 1 to December 31) of VND 100 million or more must declare real estate rental tax, applicable to both full-year and part-year rentals. After declaring, pay tax to the tax authority.

In the opposite case, if the revenue from real estate rentals calculated in a calendar year (from January 1 to December 31) is less than VND 100 million or more and is exempt from paying tax and declaring property rental tax, this applies to both full-year and part-year rentals. In the case of real estate rentals for less than 12 months in a calendar year with an income of less than VND 8.34 million/month, it is not required to declare real estate rental tax. Besides, if the annual revenue is less than 100 million, it is necessary to prove this and request a refund or deduction of the amount paid.

4. Instructions for personal real estate rental tax declaration 2024

Below are detailed instructions on the procedure for declaring real estate rental tax. This is the step where declarants often make mistakes and have to edit many times, causing more time and effort. Therefore, individuals should pay special attention to this part to make the declaration as accurate and quick as possible.

The place to submit tax declaration documents is specified as follows: Revenue from real estate rental, individuals submit documents to the Tax Department directly managing the place where the real estate is rented;

The deadline for submitting real estate rental tax declaration documents is specified as follows:

• Declare tax for each payment period, immediately at the beginning of the rental period of each payment period (no later than 10 days from the beginning of the rental period of the payment period);
• Tax declaration by calendar year, i.e. tax declaration once a year, is no later than January 31 of the following calendar year.

Individual real estate rental tax declaration dossier, including:

• Real estate rental tax declaration form;
• Form 01-1/BK-TTS appendix of revenue from real estate rental
• Copy of real estate rental contract, appendix of real estate rental contract;
• Notarized copy of ID card/Citizen ID card of the real estate owner.

Regarding the deadline for tax payment, individuals must pay attention to paying tax on time to avoid late payment penalties. Individuals pay real estate rental tax no later than the last day of the deadline stated on the tax declaration dossier. Individuals who rent real estate can contact a unit specializing in tax fees to perform annual tax declarations on their behalf, to save time and costs. When hiring a specialized tax unit, tax declarations are also faster than individuals preparing their own documents.

5. Where to submit tax declaration for personal real estate rental

Individuals with income from real estate rental should submit tax declarations to the Tax Department directly managing the location of the rental property.

Because the location of the rental property belongs to the local tax unit, it is easier to control and manage the rental activities of individuals. Therefore, when there are many rental properties in the same administrative unit, individuals must declare all revenue from the properties in that area. If the rental property is in a different tax management area of ​​the locality, each location must submit tax declarations to a subordinate tax department.

In short, it can be seen that the rental of personal real estate is also strictly managed by law, with full tax and fee collection every year. Individuals who rent out large real estate properties often have quite large revenue and must calculate and pay taxes in full to state agencies.

Above are Viet My’s findings on Personal real estate rental tax declaration 2024. Please contact VIET MY LAW AND ACCOUNTING immediately if you have any further questions about tax procedures or want to contact a unit to do tax procedures for you.