There are plans to reduce the tax on flat rentals: how much will landlords have to pay?
MP Nina Yuzhanina announced the adoption of amendments to Bill No. 15111-d. The bill’s details on the Verkhovna Rada website show that the document was registered on 6 April 2026, and on 9 June, parliament adopted it as law, after which it is being prepared for signature.
Ukraine may reduce personal income tax on rental income from residential and non-residential property.
According to MP Nina Yuzhanina, during the consideration of draft law No. 15111-d, the Verkhovna Rada supported amendments under which, from 1 January 2027, personal income from renting property to other individuals will be subject to personal income tax at a rate of 5%.
Currently, this rate stands at 18%.
Separately, landlords, as is currently the case, will have to pay the military levy. Its rate is 5%.
In other words, the total tax burden on rental income for individuals may fall from the current 23% to 10%: 5% personal income tax and 5% military levy.
How much will landlords pay
If a flat owner receives, for example, 20,000 UAH in rent per month, under the current rules, taxes on such income amount to 4,600 UAH: 3,600 UAH in personal income tax and 1,000 UAH in military levy.
Under the new model from 2027, the tax burden on this amount could be 2,000 UAH: 1,000 UAH in personal income tax and 1,000 UAH in military levy.
In other words, the owner will pay less specifically on rental income.
However, there is an important caveat. According to Yuzhanina, a landlord receiving such income will lose their property tax relief.
What will happen to the property tax relief
This refers to the tax-exempt area, which currently reduces the tax base for property owners.
For a flat, this allowance is 60 sq m, and for a residential house, 120 sq m. For various types of residential property, a combined allowance of 180 square metres applies. These figures are provided by the State Tax Service in its guidance on property tax.
According to Yuzhanina, once rental income is officially declared, the owner will lose this allowance.
This is precisely why the change does not automatically mean that all homeowners will ultimately pay less in total taxes. The rate on rental income will be lower, but there may be an additional obligation to pay property tax without the allowance.
Why this appeared in the draft law on digital platforms
Draft Law No. 15111-d is officially titled “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine Regarding the Introduction of International Automatic Exchange of Information on Income Received Through Digital Platforms and the Taxation of Such Income”.
The Ministry of Finance explained that the document introduces a special approach to the taxation of income received by individuals through digital platforms, and the new rules are to come into force no earlier than 1 January 2027.
Activities subject to reporting under these rules include, in particular, property rental, the provision of services, the sale of goods and the rental of vehicles. Digital platform operators must collect information on sellers and their income and pass it on to the tax authorities.
However, Yuzhanina’s statement concerns a specific amendment regarding income earned by individuals from the letting of residential and non-residential property to other individuals.
You still need to file a tax return
According to Yuzhanina, rental income will need to be included in the annual tax return.
However, the return will not need to include other income on which tax has already been paid and for which the tax authorities already hold records.
This is important for flat owners who officially let out their property: the reduction in the personal income tax rate does not remove the obligation to declare rental income to the state.
Why is the rate being reduced?
Yuzhanina believes that reducing personal income tax from 18% to 5% could act as an incentive to declare rental income.
The logic is simple: the current burden of 18% personal income tax and 5% military levy makes official declaration unattractive for many landlords.
A lower rate could encourage flat and house owners to draw up contracts and declare their income officially.
At the same time, the final outcome will depend on how the State Tax Service applies the rule, how property tax will be calculated following the loss of the tax relief, and whether the President signs the law.
What is important
For flat owners, the main change is this: the tax specifically on rental income is set to be reduced.
Instead of 18% personal income tax and 5% military levy, it could be 5% personal income tax and 5% military levy.
In other words, the total tax burden on rental income will fall from 23% to 10%.
However, at the same time, the owner may lose the property tax exemption – 60 square metres for a flat or 120 square metres for a house. Therefore, for each individual owner, the final outcome will depend on the size of the property, the rent amount and the local property tax rate.
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