If you are a landlord, you have to consider the tax implications of letting property. In this article, we will cover the basics of income tax with respect to income from Irish rental property.
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 01 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.
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 Pay 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. Make sure to keep copies of all invoices.
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
Mortgage interest
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.
Pre-letting Expenses
If a property has been unoccupied for a 6-month period you can claim for certain pre-letting expenses like repairs or painting.
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.
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.
A note on mortgage and loan repayments
Mortgage repayments are not an allowable expense. Even if your mortgage payments on a property are more than the rent you receive, you cannot claim them as an expense.
The mortgage interest element of your repayments is an allowable deduction. You can deduct 80% of the interest paid on your mortgage on a rental property.
This is also the case for interest on loans used to improve or repair the property.
Where a property was let to a tenant on a social housing scheme for a period of three years a landlord could get a tax deduction for the full 100% of the loan interest. The extra tax deduction can be claimed at the end of the third year once all the relevant criteria are met. One of these criteria is that you must notify the RTB in a prescribed form of your intention to avail of this scheme at the outset of the tenancy.
In order that you can claim a deduction for the mortgage interest accrued on any loan associated with the rental property you must, as a landlord, comply in full with the registration requirements of the Residential Tenancies Board (RTB).
Can I claim the 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.
What do I do if I let multiple properties?
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.
What do I do if I have a loss on my investment 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.
Non-Resident landlords tax reporting requirements
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. This notification and accompanying payment, needs to be submitted within 21 days of paying the rent to the non-resident landlord.
Local Property Tax (LPT)
It is the obligation of the landlord and not the tenant to ensure that the correct Local Property Tax has been calculated and paid on each property that they own. This is a separate return to your annual Form 11 tax return.
Revenue can impose severe sanctions for those who fail to pay their property taxes on time, they can withhold a tax clearance cert which can be very damaging to any other business interest the landlord may have. They can also impose a 10% surcharge on your income tax liability if local property tax returns are not completed and paid in full, often leading to charges far in excess of the local property tax itself.
Do landlords need to be VAT registered?
Residential lettings are exempt from VAT so if you are a residential landlord you can’t register or charge VAT.
If you rent commercial property they are also normally exempt from VAT. However, with a commercial property landlords can choose to "opt to tax" a commercial letting in writing. If you do this, you need must then register for and charge VAT at the appropriate rate.
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).
Don’t indulge in DIY! Get an expert involved
DIY can be a great approach for jobs around the house but not when it comes to your tax return.
The rules around the taxation of rents change each year and it can be difficult to keep up with all the changes. The Revenue guidelines around what expenses can and cannot be claimed are quite strict and getting it wrong can mean costly unforeseen bills landing on your doorstep. By engaging with TaxAssist Accountant you have the peace of mind of knowing you are dealing with an expert who will ensure that you are paying the right amount of tax. Your accountancy fee is also an allowable deduction against your rental income so the true cost will be a lot less than you might think. Contact us today to book a free consultation about your tax return.
Do you need help with your Landlord Tax Return?
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For those that use Revenue Online Services (ROS) the pay & file deadline is Wednesday 18 November 2026.
Last updated 15 Oct 2026
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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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