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Rental Income - Amendments via Act V of 2012

Rental Income Received from the Housing Authority - Article 31 A of the ITA

 The introduction of Article 31 A was included in the ITA via Act V of 2012.   This Article deals with rental income received from the Housing Authority.  A beneficial tax rate of 5% will be levied on gross rent received with respect to the rental of immovable property to the Housing Authority for a period of not less than 10 years.

 The person renting out the immovable property will receive the rent net of the 5% final tax by the Housing Authority.  In addition, the Authority will also provide the Inland Revenue Department with details of the recipient, details with respect to the amount of rent paid, amount of tax deducted.  The Housing Authority will forward the amount of tax withheld to the Inland Revenue Department by the 14th day following the end of the month during which the rent was paid.

 Such tax is a final tax and is not available as a credit or refundable in any way. 

 

Rental Income Received which is subsidised by the Housing Authority – Article 31 B of the ITA

This Article applies to any person who is an owner of immovable property and rents such property to a person receiving rent subsidy under any scheme administered by the Housing Authority.

The owner of the immovable property should be registered with the Housing Authority for this purpose and should comply certain conditions imposed by the Housing Authority.

A beneficial tax rate of 10% will be levied on the gross rent received.  The person renting out the immovable property will receive the rent net of the 10% final tax by the Housing Authority.  In addition, the Authority will also provide the Inland Revenue Department with details of the recipient, details with respect to the amount of rent paid, amount of tax deducted.  The Housing Authority will forward the amount of tax withheld to the Inland Revenue Department by the 14th day following the end of the month during which the rent was paid.

Such tax is a final tax and is not available as a credit or refundable in any way

 

Rental Income Received from Restored Property - Article 31 C of the ITA

This Article applies to any person who is the owner of immovable property and rents out such immovable property.  The immovable property should have been restored in accordance with any scheme issued for this purpose by MEPA providing for the restoration of grade 1 or grade 2 scheduled properties or property situated in an urban conservation area.  In addition, the owner of the immovable property should also comply with any conditions imposed by MEPA in connection with such scheme and submit such forms and documentation as the Commissioner may require.

A beneficial tax rate of 10% will be levied on the gross rent received where the property is being rented out for a residential purpose.  A beneficial tax rate of 15% will be levied on the gross rent received where the property is being rented out for a commercial purpose.  The tax should be forwarded to the Inland Revenue Department by not later than the 30th June of the year following that when the rent was received

Such tax is a final tax and is not available as a credit or refundable in any way

MEPA will provide the IRD with a yearly account of the individuals who availed themselves from the restoration scheme.