Tunisia Rental Income Tax Guide 2026

Rental Income — Taxed as Ordinary Income Under IRPP

Rental income from Tunisian property is classified as property income (revenus fonciers) and must be declared in the annual IRPP return. The net rental income (after deductions) is added to the taxpayer's other income (salary, business income, etc.) and taxed at the progressive IRPP rates (0-40%). There is no separate withholding tax on rental payments to resident landlords — the tenant does not withhold any tax, and the landlord settles the tax through the annual return. For example, a landlord with TND 24,000 in net rental income (after deductions) would pay IRPP at their marginal rate.

Simplified Deduction — 20% or 40% of Gross Rent

Instead of itemising actual expenses, landlords may claim a simplified deduction for expenses:

• Unfurnished rentals (location vide): 20% of gross rental income — covers maintenance, repairs, insurance, and management costs
• Furnished rentals (location meublée): 40% of gross rental income — higher deduction reflecting the additional costs of furnishings and equipment

The simplified deduction is applied automatically when the landlord selects this option in the IRPP return. The taxpayer may switch between simplified and actual deductions from year to year. For example, a landlord with TND 30,000 in gross rent from an unfurnished property deducts TND 6,000 (20%) and declares TND 24,000 as net rental income.

Itemised Deductions — Actual Expenses

Landlords who prefer to claim actual expenses may deduct the following from gross rental income:

• Mortgage interest: Interest on loans used to purchase, construct, or improve the rental property
• Repairs and maintenance: Costs of keeping the property in a habitable condition (not capital improvements)
• Property insurance: Premiums for buildings, contents, and landlord liability insurance
• Property management fees: Fees paid to managing agents or real estate agencies
• Land tax (taxe foncière): Annual land tax paid to the municipality
• Depreciation: Building depreciation at 3-5% per year
• Service charges: Common area maintenance in apartment blocks

Capital improvements (extensions, major renovations) are not immediately deductible but may be claimed through depreciation over time.

Non-Resident Landlords — 15% WHT

Non-resident landlords receiving rental income from Tunisian property are subject to a 15% withholding tax on gross rent. This is a final tax — the non-resident landlord does not need to file an annual return for rental income. The tenant (or property manager) must deduct the 15% and remit it to the tax authority. No deductions are allowable against the gross rent for non-residents. Reduced rates may apply under double tax treaties.

Record-Keeping Requirements

Landlords must maintain records of rental income and expenses, including lease agreements, rent receipts, invoices for expenses, mortgage statements, and land tax payment receipts. Records must be retained for at least 5 years after the tax year. The tax authority may request these documents during a compliance audit.

FAQs

Is rental income subject to VAT?

Residential rental income is exempt from TVA. Commercial rental income is also generally exempt, though certain short-term accommodation (hotels, guesthouses) may be subject to TVA at 13%.

Can I deduct mortgage principal from rental income?

No, only the interest portion of the mortgage payment is deductible. The principal repayment is a capital payment and is not deductible for tax purposes.

How is rental income from foreign property taxed?

Tunisian tax residents must declare rental income from foreign property in their annual return. A foreign tax credit may be available for taxes paid in the source country, limited to the Tunisian tax attributable to that income.

Can I deduct home office expenses if I manage rentals from home?

Yes, a portion of home office expenses may be deductible if a dedicated space is used exclusively for managing rental properties. The deduction should be proportional to the floor area used.

Disclaimer

This guide provides general information about Tunisian rental income taxation for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Tunisian tax advisor or the Ministry of Finance for advice specific to your situation. InvestmentKit does not provide tax advice.