TAIPEI (Taiwan News) — The Ministry of Finance said Thursday that tenants no longer need to receive the consent of their landlords to apply for a tax deduction, but they do need to present three key documents when filing.
As the tax filing season approaches in May, MOF held a press briefing on 2024 income tax filing procedures, per CNA. MOF Taxation Administration Director-General Sung Hsiu-ling (宋秀玲) said that a major change this year is the reclassification of rental expense deductions, from an itemized deduction to a special deduction.
Sung said this change aims to ease the financial burden on households that rent. She emphasized that claiming the special deduction for rental expenses no longer requires the landlord’s permission.
Lee I-hui (李怡慧), director-general of the National Taxation Bureau of the Northern Area, explained that if a taxpayer, their spouse, or dependent immediate family members do not own houses in Taiwan and are renting a residence for personal use, they may claim the special deduction for annual rent expenses. However, the expenses claimed must be made after subtracting any government rental subsidies.
The maximum deductible amount is NT$180,000 (US$5,500). This deduction is not subject to verification by authorities and must be self-reported by the taxpayer.
Lee added MOF has made exceptions for certain property owners. Even if the taxpayer or their family owns a home in Taiwan, they may still be eligible to claim the rental deduction if they meet specific conditions.
These conditions include situations such as the home being damaged or destroyed, owning a jointly inherited property, renting in another location due to work, study, or medical needs, or being affected by court-ordered separation or domestic violence.
To claim the rental deduction, Lee said taxpayers must submit the following three documents:
- A copy of the lease agreement
- Proof of rent payment, such as a receipt signed by the landlord, an ATM transaction slip, or a remittance certificate
- Either:
- Proof of household registration at the rented address during the tax year, or
- A signed declaration stating the property was used solely for self-occupancy and non-business purposes during the tax year
For those who do own a home but qualify under special conditions, they must check the appropriate box in the e-filing software or on the paper form and attach supporting documentation.
Lee also reminded the public that the deduction for rental expenses is subject to a means test. Taxpayers are not eligible if:
- Their applicable income tax rate is 20% or higher,
- Their dividend income is taxed separately at 28%, or
- Their basic income exceeds NT$7.5 million
Lee said these limits are in place to ensure efficient use of public resources. Previously, MOF estimated the new policy, reclassifying rental expenses as a special deduction and raising the deduction limit to NT$180,000, would benefit between 460,000 to 1.02 million households, resulting in tax savings of around NT$3.2 billion to NT$7.1 billion.
