Russia mulls tax break for landlords
31 January 2014
Posted by: Author: Tatiana Smolenska
Author: Tatiana Smolenska
Russia's Economic Development Ministry has proposed cutting tax rates for citizens who lease their apartments in order to reduce the numbers of unregistered landlords.
The proposal involves reducing the tax on rent revenues to 50-60 percent of the current 13 percent personal income tax.
According to the president of the City Economy Foundation Institute, Nadezhda Kosareva, a mere five percent of property owners in Moscow pay tax on income from renting out apartments, resulting in a loss to the city's budget of about RUB27.5bn (USD784m).
Moscow's mayor, Sergei Sobyanin, claims that roughly 130,000 apartments in the capital are rented out illegally.
The vice president of the Russian Guild of Realtors, Konstantin Aprelyev, said that the government needs to substantially lower the tax on rental income while increasing the penalties for dodging it in order to get the majority of landlords to comply with the tax. "To take a 2 percent tax from 90 percent of the market is much more profitable than to take 13 percent from between 3 and 5 percent of the market," he said.
This article first appeared on tax-news.com.