How to settle short-term rental with the tax office?

In recent years, short-term rentals have become a popular source of income for many people using platforms such as Airbnb or Booking.com. However, with the growing popularity of this type of rental, issues related to tax settlement arise. In the article below, we will present a practical guide that will help you understand how to settle short-term rentals.

Income from short-term rental is taxable

Regardless of the form of rental, tax must be paid on the income generated. The tax rate depends on several factors, the most important being: the form of ownership of the premises and the owner's expectations regarding the possibility of deducting costs.

Rental as part of a business activity or as private property?

The key issue when settling tax on income from short-term rental is the classification of the property in the owner's estate.

If the apartment for rent is private property - the only possible form of taxation is a lump sum on recorded income. This restriction is effective from January 1, 2023

If the apartment is rented as part of business - the owner/entrepreneur will settle the rental income in accordance with the tax rate for his business.

What tax do I have to pay on short-term rental income?

In the case of private rental, the only applicable rate is a lump sum rate of 8.5% up to PLN 100,000 of income per year. After exceeding the limit of PLN 100,000, the lessor will pay 12.5% tax on the excess over the limit.

Spouses have a chance to increase the limit to PLN 200,000 if they declare that they settle rental income jointly.

For owners whose apartment is an asset in business, three taxation options will be available: flat tax, tax scale, lump sum on recorded income.

How to settle rent with the tax office?

Private rental tax can be paid monthly or quarterly by the 20th of the month (or the 20th of the month after the quarter). The correct symbol is PIT-28. The annual settlement deadline is the end of April of the following year. All you need to do is submit PIT-28 to the appropriate tax office.

Can I deduct the costs related to furnishing the apartment?

Since the only form of taxation of income from private rental is a lump sum on recorded income, this excludes the possibility of deducting any costs incurred by the owner.

Unfortunately, costs such as renovation, equipment, Internet and TV fees, etc. cannot be included in the settlement with the tax office. The situation is different for entrepreneurs who rent an apartment as part of their business activity. If their form of taxation is a tax scale or a flat tax, then they can deduct the costs incurred for the maintenance, renovation and furnishing of the apartment.

For private owners, only one taxation option is available - a lump sum of 8.5% without the possibility of deducting costs. Entrepreneurs, on the other hand, will settle their income from short-term rentals in accordance with the form of taxation of their business activity.

If you run a business, take advantage of our offer of short-term rental management of your apartment.

BillBerry Apartments - Apartment Rental Leader in Tricity