PROPERTY TAXATION

Rush to clear rental backlog

rush-to-clear-rental-backlog

The tax administration is rushing to process 570,000 declarations of reduced rental revenues submitted by landlords for the period from March to December 2020. They mostly concern leased properties with more than one owner and cases where information about the properties is missing.

At the same time, the state is preparing to pay landlords two months’ worth of compensation for the rents that were reduced by 40-100% for February and March 2021, which as the Finance Ministry has announced will be disbursed around mid-April.

According to tax authorities, the identification of properties with more than one owner is almost completed, so the backlog can be cleared and any mistakes or injustices can be avoided. Most of those cases have already been identified, and the updating of information has started on the platform of property rental declarations.

For its part, the Independent Authority for Public Revenue will inform co-owners that, in this case, the compensation for all owners will be paid out on the basis of the Covid rental reduction declaration of the one owner. The co-owners will receive an email inviting them to visit that platform.

Another category of declarations being processed concerns assets that appeared to be leased under different rental contracts at the same time. To avoid delays or errors in payment, the tax authority has recommended that landlords declare the termination of any contracts that are no longer valid on the platform.

In cases where the identification of the properties has been completed without the compensation having been paid out to date, that is expected by the end of this week. As for cases where identification is not possible due to the shortage of property information, the authority will telephone the landlords for them to provide the necessary data.

Meanwhile, the ministry’s handling of cases where landlords have allowed properties to be sublet has created major problems for owners. At first the ministry said both the tenant and the subletting party would pay a reduced rent, before asking tenants to pay the full rent having received state compensation, though hardly anyone complied with that.