QUESTION: Taxes and real estate: how to declare rental income?

Declaring income from renting out residential or commercial real estate is a direct obligation of every owner striving to conduct legal and safe entrepreneurial or investment activities. When it comes to the topic of taxes and real estate, it is extremely vital to avoid extremes: you should neither excessively inflate expectations from passive income nor neglect the requirements of the law, leaving room for a comfortable life and financial stability.

As the primary taxation regime, landlords most often choose the status of a self-employed person, registering for the professional income tax. This allows paying only 4 percent when renting housing to individuals and 6 percent when working with legal entities, with the entire process of income accounting and receipt generation happening automatically via the "My Tax" mobile application. An alternative option is submitting a standard 3-NDFL declaration at a rate of 13 percent or purchasing a patent for individual entrepreneurs.

To successfully implement this process, record your progress with small control points. For example, monthly generate receipts for tenants on the day payment is received, quarterly check the total amount of incoming income to monitor limits, and once a year analyze the efficiency of the chosen tax regime. Such a disciplined approach eliminates the risks of fines from the tax office and allows you to clearly control the real profitability of your rental business.