Honduras Rental Income Guide 2026

Overview — Rental Income Tax in Honduras

Rental income from letting or leasing of immovable property (land and buildings) is chargeable to ISR in Honduras. Net rental income (gross rent minus allowable expenses) is included in the landlord's ordinary income and taxed at progressive rates. For individuals, the net rental income is added to other income and taxed at the marginal ISR rate (10–25%). For companies, it is included in taxable profit at the standard 25% CIT rate. When rent is paid by a business to an individual landlord, the tenant may be required to withhold 12.5% of the gross rent as an advance payment of ISR and remit it to SAR.

Allowable Deductions

Landlords may deduct the following expenses against gross rental income:

• Repairs & maintenance — not capital improvements
• Property management fees — paid to licensed agents
• Insurance premiums — building and fire insurance
• Mortgage interest — interest on loans used to acquire or improve the property
• Municipal property tax — Impuesto de Bienes Inmuebles
• Depreciation — straight-line depreciation on the building (not land)
• Legal & professional fees — for lease agreements and tenant disputes

To claim deductions, the landlord must maintain proper receipts and records. The election for deductions is made in the annual ISR return. If deductions exceed rental income, the loss may offset other income.

Withholding Tax on Rent

When a business or company pays rent to an individual landlord, the payer must withhold 12.5% of the gross rent as an advance ISR payment and remit it to SAR within the following month. The withheld amount is credited against the landlord's final ISR liability when they file their annual return. The landlord receives a withholding certificate as proof of tax paid. The withholding tax applies to both residential and commercial property rent when paid by a registered business.

Vacant Property Rules

Rental income is only taxable when the property is actually let. There is no deemed rental income for vacant or owner-occupied properties. Municipal property tax continues to apply regardless of occupancy. If a property is let for only part of the year, only the rental income for that period is taxable. Expenses incurred during vacant periods (e.g., security, maintenance) may be deducted if the landlord itemises deductions. Short-term letting (e.g., Airbnb, holiday rentals) is also subject to rental income tax.

FAQs

Who is responsible for withholding rental tax?

The tenant, if they are a registered business, must withhold 12.5% of gross rent and remit it to SAR. Individuals renting from another individual are generally not required to withhold, but the landlord must declare the income.

What if I rent my property through an agency?

The agency may be designated as the withholding agent. The agency must withhold and remit the tax before transferring net proceeds to the landlord.

Are advance rent payments taxable in one year?

Yes, rental income is taxable in the year it is received, regardless of the period it covers. Advance rent for multiple years is fully taxable in the year of receipt.

Disclaimer

This guide provides general information about Honduran rental income tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Honduran tax advisor or the Servicio de Administración de Rentas for advice specific to your situation. InvestmentKit does not provide tax advice.