Occasional rental income from property
You can rent out assets and property to other people either directly or through different transaction platforms. Transaction platforms are online services where users can offer products and services to others in exchange for compensation.
Examples of private or co-owned property you could rent out:
- car, camper van, boat or trailer
- storage space or a parking spot
- firewood processor or chain saw.
Rental income is subject to tax
You are liable to pay tax on rental income even if you only receive it occasionally. You can make the following deductions from your rental income:
- expenses that are directly related to the rental operation
- overhead costs for the time the property was rented out.
The property's purchase price is not deductible if its primary use is not production of income through rental operation. The Tax Administration will evaluate whether the property is used primarily for the production of income or whether it is primarily for private use.
You can report your income also on Form 7L (Rental income for other property).
Example: Antti needs to transport furniture every now and then, and he has bought a trailer for this purpose. He uses an online transaction platform to rent out his trailer, because otherwise the trailer would be unused for most of the time. The trailer's purchase price was €1,700. The trailer is covered by a mandatory traffic insurance that costs €30 per year.
During the past year, Antti has rented the trailer for 15 days and received a total of €450 in rental income. The transaction platform provider takes 5% of Antti's rental income as service fees.
Antti can deduct the €22.50 of service fees from his rental income in taxation since they are directly related to the rental operation. In addition, he can deduct the part of the insurance premiums corresponding to the trailer's rental time. This deductible amount is €1.23 (= 15/365 x €30). Antti cannot deduct any part of the trailer's purchase price, since the trailer is not primarily used for the production of income.
Example: Liisa has used a transaction platform to rent out her car which is also in her own use. The car's purchase price was €26,000. In the past year, Liisa has paid €1,000 in mandatory insurance premiums and €350 for maintenance and testing.
Liisa has also rented the car for 50 days and received a total of €1,500 in rental income. The transaction platform provider takes 5% of Liisa's rental income as service fees.
Liisa can deduct the €75 of service fees from his rental income as expenses directly related to the rental operation. In addition, she can deduct the part of the insurance premiums and maintenance costs corresponding to the car's rental time. This deductible amount is €184.93 (= 50/365 x €1,350). Liisa cannot deduct any part of the car's purchase price, since the car is not primarily used for the production of income through rental operation.
Example: Markku has rented out a parking spot he owns for the summer (3 months). The shares that give Markku the right to the parking spot cost him €28,000. The monthly charge that Markku pays to the housing company is €25. The rental ad Markku posted online cost €20.
Markku has received a total of €450 in rental income. He can deduct the €20 for the rental ad from his income in taxation, since advertising costs are directly related to the rental operation. In addition, he can deduct the housing-company charges for the rental period, which comes to €75 (= 3 x €25). The purchase price of the shares cannot be depreciated or otherwise deducted in the taxation of rental income.