Irish Rental Income

While there are a few different types of rental income, the most common is earnings from the letting of a house, apartment, building, office or land.

If you are paying tax currently at the higher rate – currently 40%, you could potential have to pay up to 52% tax on your deemed rental profit. This includes PRSI (4%) and USC (max 8%).

If you earn rental income even if you do not make a profit, you must do a self-assessment tax return (From 11). This is due, 31st of October each year.

Thankfully, there are quite a few expenses that landlords can claim against their rental income, this will significantly reduce the amount of deemed taxable income. In brief anything that is incurred wholly and exclusively for the property. Allowable expenses include:

• Mortgage interest incurred on the property
• Management fees
• Utilities, refuse and other service charges
• RTB registration fees
• Insurance premiums
• Advertising expenses
• Repairs and Maintenance costs to the property
• Long term deduction on certain items – Wear and tear.

You will be asked to provide proof for each deduction you claim on your return, so be very careful to save all documentation related to any expenses associated with your rental properties.

There are some expenses which the Revenue Commissioners do not consider allowable that you will not be able to claim against your income. These include:

• Expenses incurred prior to the property being let
• Expenses incurred after the last letting
• Local Property Tax
• Cost for your own labour when repairing or maintaining the property

The Mortgage Interest Relief allows landlords to claim the interest on their mortgage payments against rental income only. You can only claim this relief for periods during which you are registered with the Residential Tenancies Board (RTB).

If you have purchased furniture, equipment, or white goods for your rental property, you may be eligible to claim these as Capital Allowances against your rental income. The current allowance is 12.5% of the cost over 8 years.

We recommend that landlords keep full and accurate records of everything relating to your lettings, even if you don’t think it’s deductible or important. This means keeping track of your lettings, invoices, bank statements, building society correspondences, cheque stubs, work orders and receipts.

As per Revenue Commissioners recommendations, it is good practice to keep these documents for 6 years.

If your rental expenses are greater than your rental income, by definition, this is a rental loss. But don’t worry, you only pay income tax once you start making a profit. Also any loss you make in the year can be carried forward to be offset against your rental profit the following year.

Yes. All landlords must register a new tenancy within one month of the tenancy’s start date. The PRTB fee is €40 per year.

Room relief, exempting that income from tax.

To be eligible to claim this relief, you must meet certain requirement with regard to the letting period, the amount of income you make from this rental and whether the room is in a “qualifying residence.”

The annual exemption limit since 2024 is € 14,000 including all bills. If your gross income does not exceed this amount, if the property is your primary private residence, and if the letting period exceeds 28 consecutive days, you may be eligible for this relief.

Yes.

The same deductions are available in computing your taxable rental income from foreign properties.

If a rental loss occurs on your foreign property, such losses can only be offset against further rental profits on the same property. They cannot be offset against rental income on an Irish property.

If you pay tax in Ireland on your foreign property in Ireland, you may be due a tax credit in the country that you are resident.

Yes.

If you are living abroad but own a rental property in Ireland, there are two options for paying rent on this income:

– Your tenant pays 20% of the agreed rent to the local tax office and pays you the remaining 80%. They then complete a form at the end of the year, which you submit to the Revenue Commissioners as proof of tax paid.

– You nominate a Collection Agent, resident in Ireland, to collect rent and file your taxes on your behalf.

If you are a non-resident landlord and have more questions about how to file your rental income tax return in Ireland, visit our page for Non-resident Landlords.