Taxation of rental income

Rental income is taxed as capital income.

The expenses that are deductible from rental income include agent commissions, mortgage interest expenses on residential investment properties, maintenance fees, repair work needed to maintain the property, repair and renewal of household equipment, and Finnish Landlord Association membership fees.

The rental income left after the deductions is taxed as capital income. If there is no income after the deductions, no tax is paid. If the deductions are greater than the income, you have a deficit in capital income. The deficit can be credited against your income tax or confirmed as a loss in capital income, in which case you can deduct the amount from capital income within the next ten years.

It is also worth knowing that the basic repair work in a rental property can be deducted from the rental income tax in some cases. Even basic renovations can sometimes be deducted during the time of effect of the expense. The deductions must be made evenly over the course of ten years at the most.

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