Tax on renting out a flat in Serbia 2026: 20% rate, standard costs, who files and how

Who pays tax on renting out a flat

Income from letting or subletting a flat, business premises, a garage, a house or land is income from real estate under the Personal Income Tax Act (Art. 65a(1) and (4)). The taxpayer is the individual who earns that income, i.e. the landlord (Art. 65b(1)). The rules on this page apply equally to a flat let to students, a family or a company for its employee, and to a garage or shop, with one difference for business premises: there the question of VAT also arises, which is covered on the page on the commercial lease agreement.

Two cases fall outside this tax. An entrepreneur who lets property as part of a registered business taxes the rent as income from self-employment, except a flat-rate entrepreneur, who still pays this tax (Art. 65a(3) and Art. 65b(2)). Short-term letting of up to 30 days, typically through tourist platforms, is taxed under the special regime of Art. 84b, per bed rather than per rent. Letting a flat for longer than 30 days, where you do not provide hospitality services, stays here (Art. 65b(3)).

The 20% rate and 25% standard costs: how it is calculated

The base is gross income less standard costs of 25% (Art. 65v(1)), and the rate is 20% (Art. 65g). That is why in practice the tax is said to be 15% of the rent: 20% of 75% of the amount.

Example: you let a flat for RSD 50,000 a month. Standard costs are 12,500, the base 37,500, the tax RSD 7,500. Per year: RSD 90,000 of tax on RSD 600,000 of rent. If the rent is agreed in euros, EUR 500 a month, the tax is EUR 75, converted into dinars at the National Bank of Serbia middle rate on the day you received the rent, so the tax amount changes from month to month.

Gross income also includes the value of obligations the tenant assumes on your behalf under the lease, for example if the tenant pays your property tax or the fixed part of the building costs. Costs that depend on the tenant's consumption are excluded: electricity, water, metered heating, telephone, internet (Art. 65a(2)). A deposit is not income until you keep it. For a sublease, the base is the difference between the rent you receive and the rent you pay the owner (Art. 65v(4)).

Actual costs instead of standard costs

Instead of the 25% standard costs you may claim the actual costs incurred in earning and preserving the income, with evidence (Art. 65v(3)). It pays off in a year of major investment: new wiring or plumbing, a bathroom, windows. The invoices must be in your name and relate to the flat you let. Typical items are maintenance and repairs, insurance, property tax, the agency fee and depreciation. The claim is made in the return itself, so in a year without investment you go back to standard costs.

Who files: an individual tenant or a company

This is where most mistakes happen. The rule depends on who pays the rent.

The tenant is an individual. The tax is paid by self-assessment: you file the PP OPO return and pay the tax within 30 days of the day you received the rent (Art. 95(6) and Art. 100a(1)(3)). The deadline runs from each rent payment received, not from the date of the lease. A separate return is filed for each receipt, so with monthly payments you have 12 returns a year; landlords who want to avoid that agree payment in advance for three or six months and file one return for the whole amount received.

The tenant is a legal entity, an entrepreneur, a flat-rate entrepreneur or a farmer. The tax is withheld at source: before payment the tenant files the individual tax return PPP-PD, calculates 20% on the rent less 25%, pays the tax and pays you the net amount (Art. 99(1)(4), Art. 101 and Art. 41 of the Tax Procedure and Tax Administration Act). You do not file PP OPO and pay nothing, but state in the lease whether the agreed amount is gross or net. On RSD 50,000 gross you receive 42,500; if you wanted RSD 50,000 in hand, the gross rent must be RSD 58,823.53.

If a company pays the rent by bank transfer but does not file PPP-PD, the liability is the company's, not yours. Keep the lease and bank statements as evidence.

How PP OPO is filed

The return is filed electronically through the ePorezi portal, with a qualified electronic certificate, an eID account with the ConsentID app or through a person you authorise with form PEP, or on paper at the Tax Administration branch for your place of residence. In the return you select the type of income (income from real estate), enter the gross amount and the date of receipt, and the portal calculates the standard costs and the tax. The lease is attached to the first return as a PDF; later returns refer to it.

The lease does not have to be notarised, either for validity or for the tax filing; a signed written lease is sufficient, and a template is on the page on the apartment lease agreement. There is no separate "registration of the lease" with the Tax Administration, the cadastre or the municipality; the PP OPO return with the lease attached is all the law requires. The tax is paid to the account from the return within the same 30 days. The Tax Administration's website also has a rental income tax calculator for checking the amount.

Annual personal income tax

Income from real estate is included in the total income for the annual personal income tax (Art. 87(2)(4)), which is payable only if total annual income exceeds three times the average annual salary in Serbia. A landlord with an average salary and one flat generally stays below the threshold, but a landlord with several flats or a high salary should, by 15 May of the following year, check the return that the Tax Administration pre-fills on the portal (Art. 92). The thresholds by year are on the page on the annual income tax.

What if you do not declare the rent

The Tax Administration obtains its data from tenants' residence registrations, companies' PPP-PD returns, payment transactions and reports from citizens. When it finds undeclared income, it assesses the tax ex officio for the period not yet time-barred, with interest at the NBS reference rate plus ten percentage points (Art. 75 of the Tax Procedure and Tax Administration Act). Failing to file is a misdemeanour for an individual with a fine of RSD 5,000 to 150,000, and a late return costs RSD 10,000 (Art. 180 of the same Act). Whoever files the late returns before an audit pays the tax and interest, with the milder offence. For several years of undeclared larger amounts, the order of filings and a conversation with a tax advisor make sense before the first step.

When to consult a tax advisor or a lawyer

A tax advisor when you have several properties, rent in kind, a sublease or several years of undeclared income, and when you are considering moving the letting into a sole trader business or a company. A lawyer when the lease itself is in dispute: the tenant does not pay, does not move out or demands the deposit back, which are questions of the Obligations Act, not tax. This page is general information; the actual amounts depend on your lease and payment dates.

Sources

• Personal Income Tax Act (Zakon o porezu na dohodak građana, Sl. glasnik RS Nos. 24/2001 ... 6/2026 - adjusted amounts and 80/2026), Arts. 65a-65g, 84b, 87, 92, 95, 99, 100a and 101
• Tax Procedure and Tax Administration Act (Zakon o poreskom postupku i poreskoj administraciji, Sl. glasnik RS No. 80/2002 et seq.), Arts. 41, 75 and 180
• Tax Administration: rental income tax calculator
• Tax Administration: Personal Income Tax Act
• Tax Administration: ePorezi portal
• National Bank of Serbia: exchange rates and reference interest rate
• Personal Income Tax Act and Tax Procedure and Tax Administration Act, consolidated texts (paragraf.rs), used to check the wording of individual articles