Like the majority of taxpayers, landlords are subject to withholding tax on their rents. The tax authorities take a tax installment from their bank account every month or every quarter.

The tax deposit system

Most income has been subject to withholding tax since January 2018. Salaries and retirement pensions are subject to withholding tax, levied by employers or pension funds, which then pay it back to the public treasury. Rents are subject to a tax deposit system deducted directly by the tax authorities from your bank account each month, or each quarter on option.

To calculate the amount of the deposit to be paid, the tax authorities apply the withholding tax rate of your tax household to your last declared taxable rents, i.e. those of year N-2 for the installment due from January to August and those of year N-1 for the installment due from September to December. The result obtained is then divided by twelve in the case of a monthly installment and by four in the event of an option for a quarterly installment. Thus, the deposit to be paid from January to August 2021 has been calculated on the basis of your taxable rents for 2019 (declared in 2020) and that to be paid from September to December 2021 will be calculated on the basis of your taxable rents for 2020 ( declared this year).

Namely: the deposit paid one year is regularized the following year, when the tax authorities know the taxable amount of your rents. Depending on the case, you are then reimbursed for the overpaid deposit or you must pay an additional deposit. Thus, the deposit paid in 2021 will be regularized in 2022, when the tax authorities will know the taxable amount of your rents collected in 2021.

Spontaneous tax installment and suspension of the installment

As a result of this method of calculation, if you start renting in 2021, you will only start paying the tax installment in September 2022, when the tax authorities will know of your rents collected in 2021 (to be declared in 2022 ). Conversely, if you stop renting in 2021, you will continue to pay the tax deposit (calculated on the basis of your 2019 and 2020 rents) until August 2022.

In the first case, you will however have the possibility of asking the tax authorities to pay a spontaneous tax deposit as soon as your first rents are collected. All you have to do is connect to your personal space on the tax website to declare the rents you will receive this year, and the tax authorities will automatically calculate the deposit to be claimed from you. This will allow you to anticipate the taxation of your first rents, and avoid having to pay all the tax due at the end of 2022.

In the second case, you will also have the possibility of asking the tax authorities to suspend the deduction of the tax deposit from your bank account as soon as the rental ends. This will prevent you from granting an undue tax advance to the tax authorities and having to wait until the end of 2022 to be reimbursed.

Consideration of land deficits

If you were in deficit in 2019 and 2020, you do not pay a tax installment this year because its calculation basis is zero. In this case, the tax due on your rents for 2021, if you are no longer in deficit this year, will be claimed from you in full at the end of 2022, when the tax authorities will know of their taxable amount.

Social security contributions are also paid at source

Rents are also subject to social security deductions at source. The tax authorities take a second installment from your bank account each month or each quarter. Its amount is calculated by applying the rate of social security contributions, i.e. 17.2%, on the same basis as that used for the calculation of the tax installment (your taxable rents for the last two years). This second installment is also regularized at the end of the following years, once you have declared your rents for the previous year. If you ask to pay a spontaneous tax deposit at the start of the rental, the tax authorities also calculate a spontaneous social security deposit deposit. And if you ask to suspend the tax deposit at the end of the rental, it also suspends the collection of the social security deposit deposit.

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