New Tenant Deduction for Rent Payments
Starting from the fiscal year 2023, tenants can deduct up to 10% of their total annual rent paid from their taxable income. This benefit is outlined in AFIP Resolution 5521/2024, published this week in the Official Gazette. The resolution is a regulation of Law 27,737, approved by the previous government in October 2023.
According to tax specialist Marcelo Rodríguez, both tenants and landlords can make use of this deduction under Article 11 of Law 27,737. The main objective is to encourage people to register their rental contracts with the AFIP to take advantage of this deduction.
For example, an employee who pays $350,000 in monthly rent can deduct a total of $420,000 annually from their taxable income. The potential savings can range from $63,000 to $147,000 per year depending on the individual’s tax rate. There is no limit to the deduction so those with higher rents can benefit even more.
Tenants should report the deduction for their 2023 rents by July 15th, 2024 so that it can be considered in the annual tax settlement. After this deadline they will no longer be able to claim it. Additionally, it is crucial that the rental contract is registered with the AFIP to qualify for the deduction as stressed by specialists Fernando López Chiesa and Florencia Iaciancio.
