North Macedonia Rental Income Guide 2026

Overview — Rental Income Tax in North Macedonia

Rental income from the letting of immovable property is taxed as part of the landlord's total annual income at the flat 10% rate. Unlike some countries where tenants withhold tax at source, Macedonian landlords are responsible for declaring rental income and paying tax through their annual personal income tax return. The tax applies to both residential and commercial property letting. The Public Revenue Office (PRO) may request lease agreements and rental receipts during audits. The law requires lease agreements to be registered with the PRO for tenancies exceeding 30 days.

Tax Rate — Flat 10% on Net Rental Income

Rental income is taxed at the flat personal income tax rate of 10%. The taxable amount is the net rental income, calculated as gross rent received minus allowable expenses. If expenses exceed rental income in a given year, the loss may be carried forward against future rental income for up to 5 years. For furnished rentals, the landlord may also deduct depreciation on furniture and fixtures. The 10% rate applies regardless of the total amount of rental income — there is no progressive rate.

Allowable Deductions

Landlords may deduct the following expenses from gross rental income:

• Maintenance and repairs — not capital improvements (deductible in the year incurred)
• Property management fees — paid to licensed agents
• Insurance premiums — property and liability insurance
• Annual property tax — municipal property tax paid
• Mortgage interest — interest on loans used to acquire or improve the rental property
• Utility costs — if paid by the landlord (water, electricity, heating)
• Depreciation — straight-line depreciation on the building (5% per year) and furniture (20% per year)
• Legal and notarial fees — for lease agreements and dispute resolution

To claim deductions, the landlord must maintain proper records and receipts. A standard deduction of 25% of gross rent (in lieu of itemised expenses) is not available in North Macedonia — actual expenses must be substantiated.

Lease Registration & Reporting

All lease agreements for residential and commercial property must be registered with the PRO if the tenancy exceeds 30 days. The registration is done online through the e-Tax portal. The lease agreement should specify the rental amount, payment terms, duration, and the parties' details. The landlord must include rental income in the annual personal income tax return (filed by 31 March). Rental income received from a tenant who is a legal entity (company) is reported separately, as the company may be required to report the payment to the PRO.

Short-Term Lettings (Airbnb)

Short-term lettings (holiday rentals, Airbnb, Booking.com) are subject to the same 10% rate on net income. Hosts must register the property for short-term letting with the local municipality and obtain a tourism classification. Income from digital platforms should be declared in the annual tax return. The PRO has been increasing its focus on the sharing economy and may cross-reference platform data with taxpayer declarations.

FAQs

Do I need to charge VAT on rental income?

Most residential property rentals are exempt from VAT. Commercial property rentals may be subject to VAT at 18% if the landlord has opted for VAT registration. The standard rule is that property rental is VAT-exempt unless the landlord elects to charge VAT.

What if I rent to a company?

If you rent property to a company, the company will report the lease payment to the PRO. The landlord must still declare the rental income in their personal tax return and pay the 10% tax. The company may be required to withhold a 10% tax at source on rental payments to non-resident landlords.

Are deposits taxable?

Security deposits are not taxable when received, as they are refundable. However, if a deposit is forfeited (e.g., due to damage or early termination), the forfeited amount becomes taxable rental income in that year.

Disclaimer

This guide provides general information about North Macedonian rental income tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Macedonian tax advisor or the Public Revenue Office for advice specific to your situation. InvestmentKit does not provide tax advice.