In an article published by El Cronista, Fernanda Laiún, partner at Laiún, Fernández Sabella & Smudt, analyzed the tax impact of the new Income Tax exemption for residential rental income and the implications this change may have for property owners.

Law 27,802 introduced an exemption from Income Tax for residential rental income, with retroactive effect as of January 1, 2026. The measure aims to encourage the supply of rental housing and reduce the tax burden on property owners.

This change is added to an existing benefit under the Value Added Tax (VAT) regime, which has long established that residential rentals intended for the tenant and their family are not subject to VAT. In many cases, this means that rental income from residential properties may now be exempt from both VAT and Income Tax.

In this new scenario, Laiún explained that the tax impact depends on the specific circumstances of each taxpayer, particularly the tax regime under which they are registered and the activities they carry out.

“In a set of activities, this means that part of the income that previously generated tax now still exists but no longer creates a tax burden,” she noted.

The analysis becomes particularly relevant for property owners who registered under the monotributo simplified tax regime exclusively due to residential rental activities. In such cases, the exemption may lead taxpayers to reassess whether remaining within the simplified regime is still convenient if taxable income disappears.

Laiún also highlighted that the treatment of Gross Turnover Tax (Ingresos Brutos) may influence the analysis, as the applicable rules vary depending on the jurisdiction.

In the City of Buenos Aires, for example, the regulations provide an exemption for residential rentals under certain conditions and for up to three properties within specific monthly rental limits. In the Province of Buenos Aires, however, the exemption applies only to one property and subject to income thresholds.

When these limits are exceeded, rental income becomes subject to Gross Turnover Tax, with rates that may range between 3.5% and 4.5%.

Beyond the tax aspect, the analysis must also consider operational and social security implications. The monotributo regime includes pension contributions and health coverage within its monthly payment. Property owners who decide to leave the regime must therefore evaluate how to maintain those benefits if they do not have another registered activity.

In this context, the reform represents a tax relief for many property owners, while also creating a new scenario that requires a case-by-case analysis before determining the most appropriate tax strategy.

👉 Full article:
https://www.cronista.com/economia-politica/alquileres-de-vivienda-sin-impuesto-a-las-ganancias-por-que-muchos-propietarios-evaluan-salir-del-monotributo/