Failure to declare rental income: tax penalties for landlords
Rental income is considered taxable income, whether derived from unfurnished rentals (property income) or furnished rentals (industrial and commercial profits – BIC). Landlords who fail to declare their rental income may face significant tax penalties, depending on whether the omission was accidental or intentional.
Unintentional failure to declare rental income
Landlords acting in good faith may correct their mistake without penalty if they do so promptly.
-
Before the filing deadline: the return can be corrected with no penalty.
-
After the deadline but before July 1st: correction remains penalty-free if the tax authorities are informed.
-
After receiving the tax notice: late payment interest of 0.1% per month applies.
If the tax authorities detect the omission:
-
interest increases to 0.2% per month,
-
a 10% penalty may apply, subject to certain relief conditions.
Intentional non-declaration of rental income
When rental income is deliberately omitted, the landlord faces:
-
a 40% tax surcharge,
-
late payment interest of 0.2% per month.
This surcharge may increase to 80% or even 100% in cases of fraud or tax assessment by default.
Impact on withholding tax
Since 2019, rental income is subject to withholding tax. Undeclared income leads to:
-
an upward recalculation of tax advances,
-
a possible 10% surcharge on unpaid amounts.
Securing your rental tax position
For high-end real estate investors, proper rental income reporting and professional management are essential to avoid costly tax consequences and protect long-term investments.
Non-declaration of rents: the penalties in the event of voluntary forgetting
If the lessor has voluntarily forgotten to declare his rents, the tax authorities will be able to rectify him if he notices his fraud. He will then bear an increase of 40% of the additional tax to be paid, in addition to late payment interest of 0.2% per month.
Note: In terms of income tax, the tax administration has a period of three years to check the tax returns and to send a proposal for adjustment to taxpayers. For example, for rent collected in 2020 (declared in the spring of 2021), the recovery period will expire on December 31, 2023.
The 40% increase will be increased to 80% if the tax authorities prove that the lessor has committed fraudulent practices. For example, if he knowingly reduced his taxable rents by deducting charges that he did not actually bear. It may even increase to 100% of the additional tax due if the lessor is the subject of an automatic taxation procedure due to its lack of response to a request for clarification or justification from the administration. tax, or its opposition to the tax audit carried out by the tax services.
Consequences of failure to declare tax at source
The declaration of rents allows the tax authorities to calculate the tax to be claimed from the lessor, but also to determine the amount of the deposit to be deducted from his bank account each month or each quarter in respect of the withholding tax applicable from January 2019. The subsequent revelation of undeclared rents automatically leads to an upward recalculation of this deposit. It can also justify the application of an increase of 10% of the fraction of the recalculated deposit that has not been paid within the legal deadlines.
VANEAU Immobilier
Tel : 01 48 00 88 75
contact@vaneau.fr
Vous souhaitez vendre - Vous souhaitez acheter - Vous souhaitez estimer