Statutory Allowance for Repairs & Outgoings

Statutory allowance for repairs and outgoings can be deducted from rental income. You can learn more about the statutory allowance here.

Points to Note for Claiming Statutory Allowance

Varying Repairing Costs

Repairing costs on properties vary from one year to another. Little may be paid on new property units. Significant amounts may have to be borne or shared by owners of individual units, say when the exterior walls of a building have to undergo repairs.

Deductions

To simplify the administration of tax assessments, a broad-brush deduction of 20% of the balance of the rental income after deducting the rates paid by the owner(s) and the irrecoverable rent will be automatically granted to you every year.

The 20% is an all-inclusive element. You cannot claim deductions separately for government rent, decoration fees, rent-collection fees, building management fees, insurance and mortgage interests. If you are eligible to and have elected for personal assessment, you can claim the mortgage interest in Part 8 of your Tax Return-Individual (BIR 60).

Evidence of Expenses

You do not have to tell the Assessor how much have been incurred on repairs and outgoings for any year. For the purpose of property tax assessments, the Assessor will not ask for evidence of the actual expenses incurred.