New AFIP Resolution Grants Tenants Up to 10% Rent Deduction in Taxable Income

The AFIP Resolution 5521/2024, published in the Official Gazette, has brought good news for tenants. With this amendment, they can now reduce their taxable income by up to 10% of the total rent paid for their primary residence in 2023 and subsequent years. This deduction is a delayed regulation of Law 27,737, which was approved the previous year.

Article 11 of Law 27,737 introduced a deduction from Income Tax equal to 10% of the total annual rent paid for housing purposes. Both tenants and landlords are eligible to take advantage of this deduction, as explained by tax expert Marcelo Rodríguez. The objective is to encourage tenants and landlords to register their rental contracts with the AFIP.

For example, if a tenant pays $350,000 in monthly rent, they can deduct a total of $420,000 annually. This deduction can result in tax savings ranging from $63,000 to $147,000 for the year, depending on the applicable tax rate. The deduction has no limit, meaning those with higher rents stand to benefit more.

Employees who are eligible for the deduction have until July 15, 2024 to report it so that it can be considered in their annual tax settlement for 2023. After this deadline, they will no longer be eligible as clarified by tax expert Sebastián Domínguez. Additionally, retired individuals and self-employed workers can also benefit from this deduction.

It is important to note that tenants must not own any other properties in order to qualify for this deduction. The rental contract must be registered with the AFIP to be eligible for the deduction. Further insight into the deduction and its requirements can be provided by tax experts Fernando López Chiesa and Florencia Iaciancio