The Verkhovna Rada supported an amendment that reduces the rate of personal income tax (PIT) for citizens who officially rent out housing from 18% to 5%. The military levy will remain at 5%, meaning the overall tax burden will fall from 23% to 10%.
Tax rates and overall burden
Individuals who officially rent out housing will pay PIT at a rate of 5% instead of 18%. The military levy of 5% remains unchanged, so the combined burden on rental income will be 10%.
Earlier, the Verkhovna Rada had been considering bill № 15111‑d, which envisaged lowering PIT for landlords to 5% from 1 January 2027.
Comment from the chair of the parliamentary committee
This was reported by Olena Shuliak, chair of the parliamentary Committee on State Governance, Local Self-Government, Regional Development and Urban Planning. “When the rate is reasonable, it is easier for people to work honestly than to take risks,” said Olena Shuliak.
According to her, the new rules are intended to simplify official rentals, give tenants formal contracts and protect their rights, and provide the state with higher revenues and a more transparent rental market.
Steps to implement the changes
Olena Shuliak noted that the adopted amendment may not be enough and that a well-designed information campaign is needed to explain to owners how to use the new rules. The next task is to communicate these changes to every property owner.
Mechanisms for declaration and the procedure for applying the new rates also need to be worked out to ensure the rental market moves into the official sphere.
