New Deductions Allow Tenants in Argentina to Reduce Annual Rent Paid by up to 10%

Tenants living in Argentina can now take advantage of a new tax deduction that allows them to reduce their annual rent paid by up to 10%. The deduction, which is outlined in AFIP Resolution 5521/2024, was published this week in the Official Gazette and is a regulation of Law 27,737.

Under Article 11 of Law 27,737, both tenants and landlords can make use of this deduction. This benefit aims to encourage tenants and landlords to register their rental contracts with the AFIP so they can take full advantage of the deduction.

For example, an employee who pays $350,000 in monthly rent can deduct a total of $420,000 annually from their taxable income. Depending on their tax rate, they could potentially save between $63,000 and $147,000 per year. There is no limit to the deduction amount for those with higher rents.

Tenants must report their deductions for the 2023 rents by July 15, 2024 if they want to be considered in the annual tax settlement. After this deadline, they will no longer be able to claim the deduction. It’s also important to note that the rental contract must be registered with the AFIP to qualify for the deduction.

In addition to this new deduction provided by Law 27,737, there is also a 40% deduction available under Income Tax Law for rental payments made on properties intended as the taxpayer’s permanent residence. However it’s worth noting that tenants do not need property ownership to qualify for these deductions as clarified by specialists Fernando López Chiesa and Florencia Iaciancio.