Questions and Answers
Can I claim for pre-letting expenses?
I am a landlord and I heard something about pre-letting expenses in Budget 2023, do I need to know anything?
In general expenses that you incur prior to letting a property are not allowable against the profits you make from renting the property, apart from advertising costs and estate agent fees. However, in a lot of cases, before a property is let out the landlord will need to have some work done, like painting or repairs.
In late 2017, the Government introduced a new relief in respect of vacant properties. This relief allowed landlords to claim a tax deduction for pre-letting expenses up to a value of €5,000, where a property had been vacant for at least 12 months.
In Budget 2023, it was announced that from 01 January 2023 landlords can now claim a tax deduction up to €10,000 for such expenses.
The 12-month vacancy period has also been reduced, so now if a property has been unoccupied for a 6-month period you can claim certain pre-letting expenses.
It is important to note however that if the property falls vacant again, or is no longer used for residential rents within 4 years of claiming this expense, it will need to be repaid.
Currently, this relief is due to expire on 31 December 2024.
Date published 29 Sep 2022This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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