7K Rental income, real estate – Instructions
Use this form to report any income earned from renting out real estate. Report the rental income even if no taxable income is left after all the related expenses have been deducted. Report only your portion of the rental income and the related expenses. If you are a co-owner of the real estate, sharing ownership with your spouse, for example, both of you need to complete your separate forms and report your own portions of the rental income and the related expenses. However, shareholders in a consortium that owns the real estate only fill in one form jointly for each rented property.
If you have several properties rented out, report the rental income and the related expenses for each of your buy-to-let properties separately.
When do I need to report rental income?
Report the rental income as soon as you start renting out the property. The Tax Administration will take the rental income into account in your tax rate or use it to determine tax prepayments. Report the rental income via MyTax in connection with applying for tax prepayment or for change in withholding tax percentage. If you use this form to report rental income, also fill in Form 5010e (Application for prepayment and/or for change in withholding tax percentage).
Rental income must also be reported in connection with submitting a pre-completed tax return. The information may already be provided. If any information is missing or inaccurate, report the rental income and the related expenses via MyTax or on this form no later than on the deadline for returning the pre-completed tax return.
Also use this form when you submit a claim for adjustment after the assessment process has finished. Fill in the claim for adjustment of income tax (Form 3308) and attach this form to your claim. The claim for adjustment can also be submitted via MyTax.
To report rental income for an application for prepayment or for change in withholding tax percentage, report the information and rental income on all the properties you have rented out. To correct the information submitted previously on the pre-completed tax return or to claim for adjustment, report all the information about the properties and the rental income that the correction or claim for adjustment concerns.
Other rental income – Select the correct form
Report the rental income earned from renting out an apartment in a housing company on Form 7H (Rental income ‒ Rental apartments) and the rental income earned from renting out other property on Form 7L (Rental income – Other property).
Forms 7H, 7K and 7L can only be used to report rental income earned from property located in Finland. If your buy-to-let property is located abroad, report the related rental income on Form 16B (Statement on foreign income (capital income)).
1 Taxpayer identification and the tax year
Enter your name and personal identity code.
Report also the tax year, i.e. the year during which the reported rental income was earned.
2 Real estate details
In this section, fill in the following information:
- the registration number and name of the real estate unit rented out
- information about the tenant: name and personal identity code or Business ID
- the tenancy period
- your share of ownership in the real estate unit (%)
- the amount of rented area (m2) if only part of the building is rented out
- your portions of gross rental income (do not deduct expenses from the rental income). If you are a co-owner of the real estate unit, sharing ownership with your spouse, for example, report only your portion of the rental income.
Were there several tenants or tenancy periods during the year?
If you had more than one tenant in the real estate unit during the year, leave the field “Personal identity code or Business ID of the tenant” empty. Instead of giving the tenant’s name, write “several”.
If you did not rent out the real estate unit for one continuous period but for several periods during the year, the tenancy period is the whole year. Enter the period in the form 1.1.20xx–31.12.20xx.
3 Expenses relating to rental income (only your portion)
3.1 Report the annual repair costs you have paid. Report the costs as expenses for the year during which you paid them.
3.2 Report other expenses relating to the property rented out. For example, insurance, real estate tax, electricity, water, heating, waste water management, cleaning and land leasing charges should be reported under other expenses.
If you have taken out a loan to purchase the real estate unit, do not report the interest on the loan on this form. The loan is an income generation loan, which can be reported via MyTax. You can also report the information using Form 50B (Capital income and deductions) when you submit your pre-completed tax return or on Form 5010e for the Application for prepayment and/or for changes to withholding tax percentage.
3.3 First, calculate depreciation charges and enter the amounts in section 4. Then, transfer the amount of depreciation for the tax year from field 4.5 to this field.
3.4 and 3.5: Calculate and report taxable income, i.e. the difference between the rental income and the related expenses. If the difference is positive, enter the amount in field 3.4. If the expenses are higher than the income, i.e. the difference is negative, enter the amount of loss in field 3.5.
4 Calculation of depreciation (only your portion)
Depreciation refers to the deduction from rental income for tax purposes of expenses incurred from purchasing a building and movable property, for example. It is the means for deducting and reallocating the acquisition costs of buy-to-let buildings, furniture, household appliances and other movables, as well as long-term investments (e.g. cost of laying asphalt in the yard). Read more about depreciation for different types of property.
If you are a co-owner of the real estate unit, sharing ownership with your spouse, for example, remember to only report your portion of the acquisition price and the other information in the calculation of depreciation that is equivalent to your share of ownership.
If the real estate has more than two buildings to which you apply depreciation, you can add together the acquisition costs of several buildings and report the depreciation details for these buildings.
At the beginning of this section, enter the following information:
- your share of the total acquisition price of the real estate unit
- the depreciation rates used:
- The maximum depreciation rate for store, warehouse, factory or workshop buildings is 7%.
- The maximum depreciation rate for residential or office buildings is 4%.
- The maximum depreciation rate for movable property within the real estate is 25%.
4.1 Share of building or property rented out of real estate acquisition price: Report the share of the building or property rented out of the total acquisition price of the real estate. The acquisition price of a building does not include the acquisition price of the lot or the costs related to the acquisition of the lot, such as the lot's share in the transfer tax, utility connection charges, or compensation for building a road or a sewer.
4.2 Undepreciated acquisition cost at the start of the tax year: Report the undepreciated acquisition cost at the start of the tax year. Undepreciated acquisition cost means the remaining acquisition price after the previous years' depreciation charges have been deducted from the original acquisition price.
4.3 Additions during the tax year: Report any additions to the property's acquisition price, such as modernisation costs paid during the tax year. Modernisation involves extending or altering a building or carrying out other similar works.
4.4 Undepreciated acquisition cost after additions: Add together the amounts entered in fields 4.2 and 4.3, i.e. report the undepreciated acquisition cost after additions. If no additions were made during the tax year, the same amount that was entered in field 4.2 is entered here.
4.5 Depreciation for the tax year: Calculate the amount of depreciation, i.e. the portion of the undepreciated acquisition cost based on the depreciation rate used. Transfer the calculated amount of depreciation to field 3.3.
4.6 Undepreciated acquisition cost at the end of the tax year: Subtract the amount of "Depreciation for the tax year" from the amount entered in field 4.4 and enter the difference in this field.
Example: You purchased a property for €100,000. The share of the lot from the purchase price is €20,000 and the share of the building €80,000. The real estate has been rented out for the whole year. You want to depreciate the building's acquisition cost as an expense from rental income. The maximum depreciation rate for the building is 4%, which equals €3,200. The remaining €76,800 is the undepreciated acquisition cost at the end of the tax year. In the following tax year, depreciation is calculated based on this amount.
Date and sign the form. Also give your daytime telephone number.