← Tax Optimization · Individuals
Rental income — real system or 20% flat rate?
For most landlords, the 20% flat rate is simple and sufficient. But if you have large real expenses on the rented property, the real system can reduce tax more.
What the law says
The 20% flat rate applies automatically to gross annual rent, with no need to justify anything with documents — net taxable income is simply 80% of the rent received.
If you have real deductible expenses (repairs, renovations, proven with invoices) exceeding 20% of gross annual rent, you can opt for the real system when filing the Declarația Unică. However, the choice stays valid for the entire duration of that rental agreement — it can't be changed year to year at will.
Art. 84 Cod fiscal, flat rate reintroduced from 2025.
How it applies, in numbers
Illustrative example: gross annual rent of 24,000 lei. With the flat rate, net taxable income is 19,200 lei (24,000 minus 20%). If in the same year you have real documented expenses (major repairs) of 8,000 lei, the real system gives net taxable income of 16,000 lei — lower than the flat-rate option, so more advantageous.
Common mistakes
The costliest mistake is opting for the real system without expenses large enough to justify the change, then finding you can't go back to flat rate within that same agreement. The second mistake is not keeping invoices for repairs — without documents, expenses aren't deductible under the real system.
