New Tax Enforcement for Landlords in Armenia
On August 11, Arthur Manukyan, Deputy Head of the State Revenue Committee, announced that income from real estate rentals is taxable. However, many individuals are currently avoiding these tax obligations. Amendments to the Tax Code of Armenia will take effect on October 1, 2023, to address this issue.
Manukyan noted that numerous rental transactions lack state registration, causing them to be overlooked by tax authorities. To combat this, a penalty of 5% of the market price of the transaction is proposed. Prime Minister Nikol Pashinyan emphasized the need to change public perception about tax payments, stating that taxes contribute to essential public services, such as road repairs and school construction.
The tax authority has reiterated that individual landlords must calculate and remit a 10% income tax on rental income within the tax year (January 1 to December 31). This tax is due by April 20 of the following year. If gross rental income exceeds 60 million drams, an additional 10% income tax applies to the amount over this threshold. According to the State Committee of Real Estate Cadastre of Armenia, apartment prices in Yerevan rose by 7.7% year-over-year in May 2023, reaching 416,700 drams per square meter, while the number of apartment sales decreased by 35.7% to 702 transactions. Conversely, rental agreements increased by 11.2%, totaling 598 during the same period.
Manukyan noted that numerous rental transactions lack state registration, causing them to be overlooked by tax authorities. To combat this, a penalty of 5% of the market price of the transaction is proposed. Prime Minister Nikol Pashinyan emphasized the need to change public perception about tax payments, stating that taxes contribute to essential public services, such as road repairs and school construction.
The tax authority has reiterated that individual landlords must calculate and remit a 10% income tax on rental income within the tax year (January 1 to December 31). This tax is due by April 20 of the following year. If gross rental income exceeds 60 million drams, an additional 10% income tax applies to the amount over this threshold. According to the State Committee of Real Estate Cadastre of Armenia, apartment prices in Yerevan rose by 7.7% year-over-year in May 2023, reaching 416,700 drams per square meter, while the number of apartment sales decreased by 35.7% to 702 transactions. Conversely, rental agreements increased by 11.2%, totaling 598 during the same period.