The deadline for income tax declarations is rapidly approaching for landlords, and failing to focus on the details may result in penalties amounting to hundreds of thousands of forints.

Common mistakes identified by tax advisory firms include improper cost accounting, neglecting to include utility costs in income calculations, and the absence of a rental agreement.

Taxpayers are obligated to report income derived from property rental, which incurs a 15% personal income tax liability.

Income can be determined either through detailed cost accounting or a simplified method allowing for a flat 10% cost deduction.

However, many landlords do not take advantage of the opportunity to deduct incurred maintenance, renovation, or utility expenses.

One frequent oversight is forgetting that utility fees paid by tenants are also considered income, even if they are paid directly to the service provider.

The tax authority's system can identify these payments, and failure to declare them presents a significant risk, as underscored by tax consultant Bagdi Lajos.

Another common error occurs when a landlord, who lacks a tax identification number, issues an invoice when requested to do so.

This can have serious tax legal consequences.

If a landlord opts for detailed cost accounting, invoices and receipts must be retained until the expiration of the statute of limitations; otherwise, the tax authority may reject the deduction of costs.

In recent years, the tax authority has implemented numerous digital enhancements.

A pre-prepared tax declaration draft now aids in reporting income from property rentals.

The tax authority's background systems also collect data from utility service providers, online advertising platforms, and banking transactions.

The tax authority is increasingly targeting individuals who regularly rent out properties yet fail to report their income.

Based on digital trails, it is becoming difficult to evade oversight, prompting experts to advise accurate and conscientious compliance with tax obligations.

Last year, approximately 170,000 individuals reported income from property rental, with nearly half of these instances involving private landlords.

While the tax authority lacks direct information on these cases, it is required that such income is included in the declarations.

According to advisory firms, a key lesson this year is that property rental is not a "semi-official" activity but subject to strictly regulated tax obligations.

Those who disregard these regulations may face significant repercussions.

Recently, around 160,000 taxpayers received warning notices from the tax authority due to identified inaccuracies in their declaration preparations.

As in previous years, the tax authority has prepared for the income tax declaration period with extended opening hours and has summarized key information related to income tax declarations.