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Landlords: All you need to know about tax on your rental property

As a landlord in Ireland, it's important to understand the tax implications of your rental income. Here are some things to watch out for on your Irish tax return.

Last updated 11 May 2023 | First published 11 May 2023

By Tadhg Moriarty, FCA CTA AITI 5 min read

Landlords

Tax for landlords on rental income

In this article, we will cover the basics of income tax with respect to income from Irish rental property.

If you are a landlord, you have to consider the tax implications of letting property.

We will be focus on the income tax implications for landlords including how you calculate the taxable profit, how much tax you’ll pay, and when.

Paying tax on rental income

An individual landlord must assess their tax position each year under the self‑assessment system. The Irish tax year runs from 1 January to 31 December, so the calendar year and the tax year are the same.

Landlords who receive rental income must calculate their taxable rental profit and review their overall income tax position each year. They are then required to report this to Revenue by filing an annual tax return.

Rent a room relief

If you let out a room in your main home, and live alongside your tenant, you may be able to claim rent-a-room relief in your tax return. This relief allows an individual to earn up to €14,000 per tax year tax-free from qualifying rent and related payments.

If the gross rental income (including payments for utilities, meals or similar services) exceeds €14,000 in a year, rent-a-room relief does not apply and the full rental profit is taxable in the normal way.

How is tax calculated on rental income?

Once you have collated your rental income and allowable expenses for the year, you can deduct the total allowable expenses from the rental income to arrive at your net rental profit (or loss). Any new rental profit is then subject to Income Tax, Universal Social Charge (USC) and Py Related Social Insurance (PRSI), as appropriate.

1. Rental Income

When a landlord receives a payment from the letting of a property, they will need to consider whether this is assessable as gross income for income tax purposes.

The following types of payments will be classified as income:

rent payments, this could be weekly, monthly or yearly
reimbursement of expenditure incurred, such as utility bills, repairs or cleaning costs
non-refundable deposits
money kept from refundable deposits

In many cases you are taxable on the sum you are entitled to receive under a lease agreement.

2. Allowable expenditure on rental income

Once rental income for the period has been established, an assessment of allowable expenditure must be undertaken. Expenditure that is incurred wholly and exclusively for the purposes of the rental business, and which is not capital in nature, can generally be deducted against rental income.

Typical allowable expenses include:

Letting agent and professional fees
Legal fees on lets of a year or less
Accountancy fees incurring in relation to the letting business
Costs of maintenance and repair work
Utility bills, such as, gas, electricity etc.
Insurance, such as building and contents
Rent, ground rent and service charges
Advertising costs for new tenants
Services such as cleaning or gardening
Stationery, postage costs and telephone costs
Costs of replacing domestic item
Mortgage interest

Can I claim the wear and tear allowance?

You can claim capital allowances on the cost of furniture and fittings in your property. This is known as 'wear and tear allowances', or 'depreciation'.

The current rate for these allowances is 12.5% of the cost per year, for a maximum of eight years. The allowances may include: furniture you purchases for your rental property and the cost of the purchase of white goods such as a fridge or a dishwasher.

Can I claim pre-letting expenses?

Subject to certain conditions from 01 January 2023 to 31 December 2027 landlords can claim a tax deduction up to €10,000 for pre-letting expenses.

What are capital allowances?

Capital expenditure means expenditure that enhances and improves the value of the property. Capital allowances are an annual allowance for expenses incurred on capital items. An example of a capital item would be if you purchase a new fridge or a washing machine. Because this is considered a capital item for the property, the cost of this will be allowed over eight years.

How much tax do you have to pay on rental income?

Your rental profit is subject to tax at your marginal rate of income tax. This means it is added to your other taxable income which arises in the tax year.

PRSI and Universal Social Charge may also apply depending on your personal circumstances.

Multiple property lettings

If you own multiple properties, you calculate your rental profit on a property-by-property basis, and then you will need to consolidate your income and expenditure to calculate your taxable profit arising for a tax year.

Individuals owning property in both the Ireland and overseas will need to keep these income and expenditure streams separate. Effectively you need to treat this as two separate rental businesses for income tax purposes. Furthermore, these profits will be reported separately on your self-assessment tax return.

From a practical perspective, landlords should ideally be keeping their rental finances separate from their personal expenditure. This will certainly aid with reporting and delivery of information if an accountant is dealing with your affairs.

Can I claim Landlord Rental Income Relief?

This relief provides an individual landlord of rented residential property a tax credit against the tax on the rental income from such properties. The maximum credit is €800 in 2025 and €1,000 in 2026 and 2027. This relief can't exceed the tax liability on the rental income.

Retrofitting Expenditure

Subject to certain conditions, a person who incurs expenditure on improving the energy efficiency of a rented residential property can claim a deduction equal to the lesser of the qualifying expenditure and €10,000.

Non-Resident Landlords

An individual that moves abroad and lets out their Irish residential property will need to consider additional tax reporting requirements. A non-resident status will require either the tenant withholding a portion of the rental income and remitting it to Revenue, or otherwise you appoint a collection agent in the state to manage your rental income. The NLWT system enables tenants or collection agents to make Rental Notifications (RN) to Revenue when making payments to a non-resident landlord.

How to pay income tax on rental income

Landlords are required to pay income tax by filing a tax return through the self-assessment system. In most cases they will file a Form 11 tax return through Revenue Online Services (ROS).

When do you pay income tax on rental income?

Where a liability has arisen, an individual will need to pay the outstanding tax by 31 October following the end of the tax year. This deadline is often extended by approximately 2 weeks for those that both file and pay through ROS.

Declaring losses on a rental property

If your allowable expenditure is more than your rental income in a tax year, a loss for your property business will arise. You need to make a Tax Return on your investment property regardless of whether it is profit or loss making. However, you should know that if you make a loss in one year this loss can be carried forward to reduce any future rental profits hence lowering your tax bill.

Taxes on selling properties

When you sell a property, you will need to assess whether capital gains tax (CGT) arises on any profit made. This is especially relevant where the property is:

a buy-to-let or other investment property, or not your main residence (i.e., does not qualify, in whole or in part, for Principal Private Residence relief). If a gain arises, CGT is generally chargeable at 33%, after deducting: the original cost, allowable acquisitions and disposal costs (e.g. legal, auctioneer/agent fees, stamp duty), and enhancement expenditure (e.g. qualifying improvement works), and after the annual CGT exemption (currently €1,270 per person) where applicable.

Do you need help with your Landlord Tax Return?

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Frequently Asked Questions

Landlords need to register each of their tenancies with the Residential Tenancies Board (RTB) every year. This must be completed within one month of the anniversary when the tenancy began.

Yes, if you make money from renting with Airbnb you need to file a Tax Return. Also, where an Airbnb host generates income of €40,000 per annum they must register for and charge VAT at the appropriate rate and file the appropriate VAT Returns.

If you are an Irish resident, any rental income earned on an overseas property will also be subject to the Irish tax regime. You will be able to claim deductions to reduce your rental profit in the same manner as you would for your Irish property.

No, Local Property Tax (LPT) cannot be claimed as a deduction from your rental profit.

For those that use Revenue Online Services (ROS) the pay & file deadline is Wednesday 18 November 2026.

Last updated 11 May 2023 | First published 11 May 2023

This 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.

Tadhg Moriarty, FCA CTA AITI

Tadhg Moriarty is a highly skilled Chartered Accountant, Chartered Tax Consultant and Chartered Tax Advisor with over 15 years of experience. Tadhg has worked with private clients and family run enterprises and has a deep understanding of the unique challenges faced by these businesses. He is committed to helping his clients optimise their tax positions and improve their financial performance.

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Landlords: All you need to know about tax on your rental property

Tax for landlords on rental income