Rent tax calculator

The new Fiscal Code eliminated the obligation to register the lease or transfer of the use of the goods at the headquarters of the Financial Administration to which you belong, but you have 30 days from the conclusion of the contract to submit to ANAF the Single Declaration on income tax.

However, here are the main changes related to rental income: what obligations you have to the Romanian state, how the tax is calculated and what social contributions you pay for rental income.

What are your obligations regarding the declaration of income from rent?

CASS tax and contributions are calculated by ANAF based on the completion of the single declaration. Starting this year, at the Financial Administration only one income statement must be submitted, chas replaced several documents, including the 220 declaration, which had to be submitted by those who earned income from self-employment or from the transfer of the use of real estate.

The new Fiscal Code also introduced a deadline by which this declaration must be submitted: March 15 of the following year for the finalization of the revenues obtained in the previous year and for the estimation of the revenues for the current year.

This means that by March 15, 2019, for example, you must submit the Single Declaration stating the rental income for 2019. You will also have to pay all contributions and taxes for 2018 by March 15, 2019.

If you sign a new lease, you must submit an updated Single Declaration to ANAF, a document that must contain the new income that you estimate you will get from the rent, based on the contract. The deadline for submitting the Single Declaration is 30 days from the date on which the contract was concluded.

How to calculate rental tax

According to the Fiscal Code, the tax on income from rents is 10%. The tax rate does not apply to the full amount of rent, but to net income, which is calculated by deducting the flat rate of 40% of gross income from rent in a fiscal year.

Example of rent tax calculation

If you own a two-room apartment that you rent for 1,400 lei per month (approximately 300 euros at the rate of 4.7 lei / euro), the tax is calculated as follows:

Gross annual rent:

1,400 lei / month x 12 months = 16,800 lei / year

Taxable amount:

16.800 x 60% = 10.080  lei

Annual income tax:

10.080 x 10% = 1.008 lei

What contributions do you pay for rental income?

According to the New Fiscal Code, the social security contribution (CAS) is no longer paid for the income obtained from rents, but only the social health insurance contribution (CASS).

The contribution for social health insurance (CASS) is paid only if the income obtained in the previous fiscal year exceeded the annual ceiling of 12 minimum gross salaries per country. This ceiling is calculated by cumulating all the revenues obtained, including:

• income from rents and the transfer of the use of real estate;
• income from self-employment;
  income from association with a legal entity;
• income from intellectual property right ;investment income;
• income from agricultural activities, fish farming and forestry;
• income from other sources.

If the amounts accumulated in a year are higher than the ceiling of 12 gross minimum basic salaries per country, a CASS of 10% is paid, and the taxable base is the minimum wage per economy valid in that year. For example, the minimum wage in the economy in 2017 was 1,450 lei, while the minimum wage in the economy in 2018 is 1,900 lei. From 2019, the minimum wage will increase to 2,080 lei.

Therefore, if during this year you obtained net income from rents (gross income minus the flat rate of 40%) that exceeds the amount of 22,800 lei (12 minimum gross salaries per economy), you will pay CASS of 10 % of this amount, ie 2,280 lei per year or 190 lei per month.

Persons exempt from CASS payment

The new Fiscal Code, with the related amendments, establishes that there are several categories of persons exempted from paying contributions to social health insurance. These include:

• spouses and parents who do not have their own income, who are dependent on an insured person;
• children up to the age of 18 and young people up to the age of 26, if they are students;
• pensioners with conditions included in the national health programs;
  pensioners, for income from pensions and for those earned from intellectual property rights.

ÎBefore submitting the Single Declaration at the ANAF headquarters, you must first check if you are not part of the categories exempted from CASS payment. You can consult article 154 from the Fiscal Code on the ANAF website.