Tenants will now have the opportunity to deduct up to 10% of the total annual rent paid for the property in which they reside from their taxable income for the fiscal year 2023 and beyond. This benefit is outlined in AFIP Resolution 5521/2024, which was published this week in the Official Gazette. The resolution is a regulation of Law 27,737, which was approved by the previous government in October 2023.
Under Article 11 of Law 27,737, both tenants and landlords can make use of this deduction, as clarified by tax specialist Marcelo Rodríguez. The main objective is to encourage tenants and landlords to register their rental contracts with the AFIP in order 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.
It’s important for employees to report the deduction for 2023 rents by July 15, 2024, so that it can be considered in the annual tax settlement. After this deadline, they will no longer be able to claim the deduction. Additionally, it is crucial that the rental contract is registered with the AFIP to qualify for the deduction.
In addition to the 10% deduction provided by Law 27,737, the Income Tax Law also allows for a 40% deduction of rental payments for properties intended for the taxpayer’s permanent residence, up to the limit of the non-taxable minimum. It’s worth noting that tenants must not own any property to qualify for these deductions, as stressed by specialists Fernando López Chiesa and Florencia Iaciancio.