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Reduced Tax on Rent

The Government has launched a new withholding tax on rent, whereby the rate of tax on income from rented properties would be reduced from a maximum of 35% to 15%, tax evasion will be discouraged, and government revenue will increase.

The 15% tax rate would be applicable to rented properties for residential purposes, including garages. Both individuals and companies are eligible for this new reduced tax rate, which is applicable on rental income earned as from 1st January 2014.

Once an individual or company declares the annual income from such rented property and gives the required details in respect of the property, on the prescribed form to be attached with the income tax return, the individual or company will pay a flat rate of 15% in tax on the total gross rental income received.

The scheme is a voluntary one, meaning that the Government is allowing rental earners to opt to retain the existing tax regime for rental income.

Should taxpayers, whether companies or individuals persist in not declaring income from rent, or declare only part of their undeclared rental income, they will be obliged to pay the full 35% tax rate, in addition to any penalties and interests, following an investigation carried out by tax authorities.

Procedure to pay the 15% tax on rental revenue

  1. One is to file Form TA 24, which form can be downloaded from the website of the Inland Revenue Department.

  2. The person (individual or company) is to give the details of the rented properties and garages, which properties and garages are being used for residential purposes. For each property and garage the gross rental revenue is to be given.

  3. The person is to calculate 15% of the rental revenue received as the tax due to the Inland Revenue Department.

  4. The duly filled and signed Form together with a cheque covering the amount of tax due is to be sent to the Inland Revenue Department by latest 30th June of the following year.

For more information call on 25998500, call the Inland Revenue Department Customer Care on 22962296, or email on taxpayerservice.ird@gov.mt.

Download the form TA 24 from https://ird.gov.mt/downloads/other/ta24.zip.

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