In Azerbaijan, a new tax obligation is being introduced for individuals who rent out residential properties they own.

In Azerbaijan, a new tax obligation is being introduced for individuals who rent out residential properties they own.

According to the draft law “On the State Budget of the Republic of Azerbaijan for 2026”, significant changes are proposed in this area.

Under the document, income received by individuals from renting out residential properties (excluding hotels and hotel-type facilities) to other individuals will be subject to a 10% tax.

This means that income earned by property owners from rental agreements will now be taxed at a rate of 10% at the source of payment.

It should be noted that the draft law is currently under discussion in the Milli Majlis (Parliament) and forms part of the 2026 state budget package.

The main goal of this new regulation is to reduce the shadow economy and increase transparency in the housing market.