How to declare rental income and pay the tax?

This procedure applies to the simplified 10% regime if You are a private individual. If You rent out property to a legal entity or to a person registered as a performer of economic activity, the tax procedure is different - in that case, the tax may be withheld by the income payer.

Log in to EDS and open the annual income declaration for the previous year in order to declare the rental income received during the year. If the system does not automatically offer to fill in Annex D1(1), indicate that You will also fill in Annex D1(1). This is the annex where income from renting out immovable property must be declared. The annual income declaration usually must be submitted from March 1 to June 1.

Enter the tenant's personal code, first name and surname, and select "06 - Ienākumi no nekustamā īpašuma izmantošanas (iznomāšanas, izīrēšanas)".

It is important to indicate the received income correctly. In "Bruto ieņēmumos", include all rent payments and utility payments received during the year if the tenant transferred them to You and You then transfer them to the building manager. Therefore, it is better for the tenant to pay utilities directly. In the field "Izdevumi, kas saistīti ar ienākumu gūšanu", You may indicate only the real estate tax paid, if You pay it. It's calculated proportionally. For example, if it's 100 euros for the year and the property was rented out for all 12 months, enter 100. If it was only rented out for 6 months, enter half—50 euros. Also, if you entered the amount for this tax, you need to attach the invoice for this tax to the appendices to your annual tax return.

The tax is calculated simply - the real estate tax paid is deducted from the gross annual income, and the remaining amount is taxed at 10%. For example, if You received 3960 euros during the year and the real estate tax was 80 euros, the taxable income is 3880 euros and the tax payable is 388 euros. Under this regime, no mandatory state social insurance contributions must be paid from rental income.

When all other annual declaration data has been filled in, review the entire declaration and submit it in EDS. The calculated tax must be paid to the unified tax account by June 23. If the tax amount exceeds 640 euros, it may be paid in three instalments - by June 23, July 23, and August 23.