Article

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 as it relates to rental properties.

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 must assess their tax position each year under self-assessment. The tax year in Ireland runs from 01 January to 31 December – i.e. the calendar year matches the tax year in Ireland.

Landlords receiving rental payments from tenants will need to assess their income tax position and reporting requirements with Revenue in the form of a tax return.

Rent a room relief

If you let out a room in your main home, and live alongside your tenant, rent-a-room relief can be claimed on a tax return. This allows an individual to earn up to €14,000 per tax year ‘tax free’. Aside from this relief however, you must calculate and pay income tax if a rental profit is made.

How is tax calculated on rental income?

Once you have collated your income and expenditure, you can deduct the total allowable expenditure from the rental income, in order to calculate your taxable profit arising for the year.

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 incurred wholly and exclusively for the purpose of the rental property, which is not capital in nature, can be deducted against rental income.

The following types of expenditure can be deducted against rental income:

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 also deduct a wear and tear allowance, for furniture or white goods purchased for the property. This wear and tear allowance is allowed over 8 years at a rate of 12.5%.

Can I claim pre-letting expences?

From 01 January 2023 to 31 December 2027 landlords can claim a tax deduction up to €10,000 for pre-letting expenses. This relief can be claimed if a property has been vacant for at least 6 months.

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 boiler. 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.

Rental income tax on 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. Further, 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 Tax Relief?

A landlord tax relief is available for the years 2024 to 2027 where tax relief at the standard rate of tax will apply to a certain amount of rental income. In 2024 the relevant income to be relieved at the standard income tax rate is €3,000. In 2025, it will be €4,000. For both 2026 and 2027 it will be €5,000 in each year.

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. Often a collection agent is appointed. The NLWT system enables tenants or collection agents to make Rental Notifications (RN) to Revenuw 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 file 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 selling property, you will need to assess whether capital gains tax (CGT) is payable. This is especially necessary for disposals of properties that are buy-to-lets, i.e not your main home.

Individuals selling UK residential properties will need to be aware of the additional reporting requirements set out by HMRC.

Do you need help with your Landlord Tax Return?

Contact TaxAssist Accountants for a free, no-obligation consultation to get a fixed fee quote

021 2427447

Or contact us

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.

More by this author

Landlords Warned They Could Be Missing a Valuable Tax Credit

1 month ago

What is the Landlord Tax Relief announced in Budget 2024?

1 month ago

What is a Form 12?

6 months ago

Choose the right accounting firm for you

Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?

021 2427447

Or contact us

Article

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

Tax for landlords on rental income