Tax incentive for reduced rent following COVID-19 outbreak
On 2 June 2020, an amended was voted which provides a tax incentive on rental income for landlords, both companies and individuals, who decide to reduce the rent amount.
According to the amendment, qualifying landlords can claim a tax credit against their income tax for the year 2020. The tax credit is equal to 50% of the rent reduction, subject to conditions, voluntarily agreed and implemented between the landlord and the tenant.
The following conditions apply:
- the monthly rent reduction must be between 30% – 50%
- the rent reduction is within the year 2020 and does not exceed 3 months
- the rent reduction is supported by a written agreement between the landlord and tenant
- the landlord and the tenant are not related parties as per the definition of the term in Article 33 of the Income Tax Law
