Vuokratulo

Vuokratulo refers to income earned from renting out real estate or parts of real estate, such as an apartment, house, or commercial premises. In Finland, vuokratulo is treated as capital income and is reported to the Finnish Tax Administration. It can be earned by individuals as well as legal entities and may come from long-term leases or short-term rentals.

In taxation terms, vuokratulo is taxed as capital income. The Finnish capital income tax structure generally applies a 30% rate on the portion up to a certain threshold and a higher rate (34%) on the portion above that threshold. The net vuokratulo, after allowable deductions, is the amount subject to these rates. The rules may be updated, so taxpayers should verify the current thresholds.

Deductions and depreciation are available for expenses that relate directly to generating rental income. Common deductible items include maintenance and repairs, property management fees, insurance, utilities paid by the landlord, and interest on loans tied to the rental property. The building portion of a property may be depreciated over time, while land is not depreciable. Proper documentation of expenses is required for tax purposes.

Losses from vuokratulo can affect future tax payments. If the rental activity incurs a net loss, it may be carried forward to offset future vuokratulo. VAT treatment differs by property type: residential rents are generally exempt from VAT, whereas rents for commercial property may be subject to VAT if the landlord has opted into VAT and the lease is a taxable supply.

Reporting is done through the annual tax return, with record-keeping of income and eligible expenses. Taxpayers should stay informed about current Finnish rules and consider consulting the Tax Administration or a tax professional for guidance.