If a person owns a rental apartment, there is exciting news. Since January 1 of this year, a series of changes to housing law has been enacted. These reforms are designed to support landlords who rent out homes as their primary residences and to help counter the ongoing rise in rents across the country. The aim is clear: encourage more homes to be available at affordable prices and reduce pressure on renters while also preserving a steady income stream for property owners.
What do these tax changes involve?
Generally, landlords can deduct 50 percent of their income from personal income tax. The real twist is that the lower the rental price offered to tenants, the greater the tax benefits for the landlord. In other words, reducing rent can directly boost the net advantage on the tax return.
Additional bonuses tied to rent discounts
If a landlord applies a rent reduction in designated stressed zones – a list that is still being defined by local authorities – a bonus may be available on the tax return that can reach as high as 70 percent. This rate applies when the tenant is a public entity or a nonprofit organization and when the dwelling participates in a social housing program with a monthly rent below the state housing plan’s limit.
In addition, if a landlord rents a property for the first time and it is located in a stressed area, or if the tenant is between 18 and 35 years old, or if the tenant faces economic hardship or families with income below a certain threshold, the landlord can also deduct up to 70 percent on the tax return.
Even better, if the landlord rents in stressed zones at a price at least 5 percent below the level stated in a prior lease, a 90 percent reduction in the personal income tax can be obtained. This means more take-home income for the owner while offering more affordable rents to tenants.
Benefits for recent renovations
Owners who have carried out improvements to the rental property in the two years before the start of the contract can also secure a minimum 60 percent bonus on the tax return for the income earned from that property. This presents a strong incentive for landlords who have invested in upgrading quality and safety in their homes.
In short, changes to housing law have opened up a broad range of opportunities for landlords. Deductions that can reach up to 90 percent and additional bonuses for price reductions or recent renovations make investing in rental property more appealing than ever. These reforms benefit not only landlords but also renters by helping to slow the pace of rent increases. It is promising news for everyone involved in the housing market. Landlords are encouraged to consider these opportunities and plan ahead for the 2025 tax return to maximize potential benefits.