The Income Tax on rent is a topic that often generates many doubts and even errors at the time of filing. It is necessary to pay close attention to this task, because the wrong or missing information can cause serious problems, leading the taxpayer to even fall into the fine mesh.
It is worth remembering that the rent payment, both for individuals and for legal entities, is subject to withholding income tax. The legal basis is found in Art. 22, Inc. VI of Normative Instruction 1500/2014 published on 10/30/2014.
But, after all, do you know who needs to declare income tax on rent and how it should be done? That is what we are going to explain in this article. Read on!
After all, who needs to declare income tax on rent?
In general, both the lessor and the lessee must declare the data on the lease of the property. Therefore, both the amount paid and the amount received are included in the income tax return. Therefore, it is important to align the value to be declared with the lessee.
For this to be done correctly, it is necessary to understand how it works for each of the taxpayers. Look!
Income tax due in a given month must be paid by the last business day of the following month. In other words, if you received rent above R $ 1,903.98 in March, you have to fill in the payment slip and pay the tax through the Darf (federal tax document) by the end of April.
For renters, it is important to make it clear, in the first place, that it is not necessary to declare income tax on rent just because of this expense. This is because your payment, by itself, is not a mandatory criterion for the declaration.
The main factor is to have obtained taxable income above R $ 28,559.70 in the previous year. For the taxpayer who complies with this requirement, it is necessary to inform the amounts spent on the rent.
The lessee must inform the values in the “Payments made” form, with the code “70 – Real estate rentals”. You must also inform the name of the landlord (the owner of the property, who receives the rents) and your CPF or CNPJ.
In addition, if the lessor declares the rent received and the tenant does not do so, a fine of 20% of the undeclared amount may be charged. That’s because the IRS crosses the data of the lessee and lessor and, therefore, they need to match.
It is worth remembering that rent is not considered a deductible expense in the income tax calculation base; but, even so, the values must be informed.
In the case of the lessee, the declaration is simple. First, you need to download the IRS program. Then, just click on “Payments made” and select the code 70 – Real estate rentals.
So, just fill in the details of the lessee and lessor (name and CPF / CNPJ) and the amounts paid during the previous year. Recalling that the values to be informed are those contained in the rental agreement, not including taxes such as property tax and condominium.
From the point of view of the lessor (owner of the property), the amount received from rent is taxable income subject to annual adjustment. So, it falls into the same category of salaries, pro labore and Social Security retirement. In the case of the owner who rents his property, the rules are a little more complex. The amounts received from the rent are included in the Income Tax calculation basis. This is because, in this case, it is taxable income.
The income tax return on rent is mandatory for those who received more than R $ 1903.98 per month. In this case, landlords must collect the monthly taxes paid through the Carnê-Leão system and import the data into the Federal Revenue program.
If the rent was paid by an individual, simply select the form “Taxable Income Received from Individuals and Abroad” and then “Import Data from Carnê-Leão”. If the rent was paid by a legal entity, you must choose the option “Taxable Income Received from Legal Entities” and, in the “Discrimination” field, enter the company data (name and CNPJ) and the amounts received. Remember to inform only the rental amount. Expenses such as property tax and condominium, even if paid by the tenant, should not be included.
It is worth remembering that if the owner of the property pays fees such as property tax and condominium, he can deduct these amounts from the rent. Thus, the tax is reduced. For that, it is enough to have declared the net values in Carnê-Leão, that is, with these expenses already discounted.
The amounts spent on brokerage and administration of real estate can also be deducted. They must be declared separately, in the “Payments Made” form. You must enter code 71 and enter the name and CNPJ of the real estate company.
How to make the income tax return on rent?
If you are the owner of the property, understand in more detail how the income tax return on rent is made.
How to calculate income tax on rent?
The collection of Income Tax on rent follows a progressive table, so that the rate is proportional to the amount received. Considering the amount of income, we have the following calculation of the tax:
- Up to R $ 1903.98: exempt;
- From R $ 1903.99 to R $ 2826.65: 7.5%;
- From 2826.66 to R $ 3751.05: 15%;
- From R $ 3751.06 to R $ 4664.68: 22.5%;
- Above R $ 4664.68: 27.5%.
For owners with more than one property, the rental amount should be considered. Consequently, the rate will also be accumulated.
What documents are needed?
As we have seen, the owner must pay the proportional Income Tax monthly in the case of rents greater than R $ 1903.98. This is done through Carnê-Leão and, therefore, the taxpayer must always have these documents in hand.
If you have not collected the amounts during the year, you will need to calculate the tax due each month. This can be done through the IRS Sicalc program. It issues the DARF with all fines and interest already calculated.
When obtaining the tax amount, just insert it in the declaration in the section “Taxable Income Received from Individuals / Foreigners”, choosing the option “Carnê-Leão Darf Pago”, whose code is 0190.
What about properties with more than one owner?
It is also important to pay attention to some specific cases, such as properties with more than one owner. If the owners do not have a partial property relationship, they must make the declaration separately. Thus, each of the owners must inform the portion of the rent received.
Finally, remember that the deadline for submitting the income tax return on rent is until 05/30/2021. It is essential to fulfill the obligations to avoid complications with your CPF, losses and other headaches.
Now, you already know how the income tax return on rent works. If you do not have your rental property yet, but want to do so, you are already prepared to shoulder your responsibilities and keep up with the law.
How long do you keep the vouchers for?
The time that you must keep the proof of receipt of rent and payment of the condominium and IPTU for at least five years. During this period, the IRS may require proof of the amounts.
The next step is to secure a peaceful location. Find out how to manage your rental online and safely, without intermediaries and with the convenience you need!