If I want to claim a tax deduction on my rent do I need the landlord to agree to this?
My prospective landlord wants to bump up the rent by NT$1,000/mo if I’m going to claim for a tax deduction. But am I right in thinking that I can claim a deduction by showing: 1) the rental contract; 2) bank remittance slips for rental payments; and 3) a statement by me that the house is for living only?
Be glad to hear from anyone who’s had first had experience of this.
f ） Rental Expense
A taxpayer, his/her spouse, and their lineal dependents renting dwellings in the ROC for the family to live (not for business use) may deduct the rental expense from his annual gross income with a limit of not more than NT$120,000; however, no deduction can be claimed if he also claims the Deduction for Interest Paid for a Loan for an Owner Occupied Dwelling. To deduct the rental expense, the following documents must be attached:
i. Copy of lease contract and payment receipt (such as receipt from landlord, ATM receipt or remittance paper)
ii. The certificate of a family member who has registered his residence in the dwelling for the year, or the taxpayer’s written statement to state that the house is for living only.
He doesn’t need to agree but the landlord may not be too happy if he starts to be taxed on his income that he receives from the rent you pay him because you “stirr up things”.
This is assuming he does what most landlords appear to do - not declare their income from rent, which is possible if neither you nor him make the rental agreement known to the tax authorities.
Such agreements are sometimes called “private contracts”, as opposed to “company contracts” where the income is fully declared and taxed (say, if your company provides you with housing and pays for it). Of course there is a certain amount of illegality involved in “private contracts”.
Once you declare the rent for tax deduction the authorities can cross-check this against the landlords declaration, thus the landlord wants to bump up the rent, making you pay his taxes.
So you better do some calculation which benefits you the most - leave things as they are, or pay him the NT1000 and get a tax deduction.
:bravo: 