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Ecuador Rental Income Tax Guide 2026

Rental income in Ecuador is taxed as ordinary income at progressive IIT rates (0-35%). Landlords can deduct a standard 10% of gross rental income for maintenance and administrative costs, plus actual allowable expenses such as property tax, insurance, and mortgage interest.

Overview — Rental Income at IIT Rates

Income from renting residential or commercial property in Ecuador is classified as ordinary income and subject to the progressive personal income tax (IIT) rates of 0-35%. Landlords must report rental income on their annual tax return and pay tax at their applicable marginal rate.

Allowable Deductions

Landlords may deduct the following expenses from gross rental income:

  • Standard deduction: 10% of gross rental income for maintenance and administrative costs (no receipts required)
  • Annual property tax: Impuesto Predial paid to the municipality
  • Mortgage interest: Interest paid on loans used to acquire or improve the rental property
  • Insurance premiums: Property insurance costs
  • Repairs and maintenance: Actual costs of repairs (not improvements)
  • Utilities: If paid by the landlord (water, electricity, gas)
  • Management fees: Fees paid to property management companies
  • Depreciation: Depreciation of the building (not the land) at rates set by SRI

Tax Calculation

Net rental income is calculated as gross rental income minus allowable deductions. The net amount is added to other income (salary, business income, etc.) and taxed at the progressive IIT rates. If the total income is below $11,722, no tax is payable.

Reporting Requirements

Rental income must be reported on the annual individual tax return (Form 102A) filed by March 31. Landlords must also:

  • Issue electronic receipts (facturas) to tenants for rent payments
  • Register rental contracts with SRI
  • Withhold income tax on rent payments if the landlord is a business (if applicable)

Withholding on Rent

When a company pays rent to an individual, it must withhold income tax at source and remit it to SRI. The withholding rate is based on the applicable IIT rate for the individual landlord. The withheld amount serves as a credit against the landlord's final tax liability.

FAQs

Is rental income subject to IVA?

Residential rental income is generally exempt from IVA. Commercial rental income may be subject to IVA at 12%.

What if I rent to a family member below market rate?

SRI may impute income at market rates if rentals are significantly below market value.

Can I deduct losses from one property against another?

Yes, rental losses can be offset against rental income from other properties for the same tax year.

Disclaimer

This guide provides general information about Ecuador rental income taxation for 2026. Always consult with a qualified Ecuadorian tax advisor or SRI directly.

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