What tax relief can I claim as a landlord?

If you rent out property located in Ireland, you must declare that income to the Revenue Commissioners and pay tax on any profits. If you’re new to life as a landlord, however, you’ll maybe not know that there are several expenses and tax reliefs that you can claim, potentially reducing the amount of tax you are liable to pay.

Here’s our simple guide to rental income and calculating your tax when renting out Irish property.

How is tax from rental income calculated?

The amount of tax you pay will depend on your personal circumstances, such as your marital status and tax band.  It will also depend on whether you receive other income by means of an employment or any other income earned.

Generally, you’ll pay either 20%or 40% income tax on your net rental income along with 0.5% to 8% Universal Social Charge (USC), depending on what other income you have.

Irish Tax Residents are also liable for PRSI of 4% on their rental income profit.

Landlords must file and pay their tax return by 31st October every year through the self-assessment system.

What expenses can I claim?

Firstly, it’s important to note that you’ll only pay tax on any profits you earn from rental income after expenses.

There are several allowable expenditures you can claim against your rental income to reduce the amount of tax you have to pay. For example, if you pay rates to the local authority or if you pay ground rent, you can claim these back against your rental income.

You can also claim property fees such as management, advertising, legal or accountancy fees, as well as claiming back any insurance premiums made.

If you are renting out property in Ireland, you will need to register with the Residential Tenancies Board (RTB).  The fee payable is €90 per tenancy.  However, late registrations will incur an additional charge.

Maintenance and repairs can also be deducted from your profit before tax. This covers the cost of maintaining your property to a standard for habitation, such as servicing boilers or fixing windows, as well as outlay on furniture, fixtures and fittings, if the property is pre-furnished.

You can claim capital allowances (wear & tear) on the cost of buying furniture and white goods for your property at a rate of 12.5% of the cost per year, for a maximum of eight years.

Finally, many landlords are also eligible for relief on mortgage interest paid in the year. When working out your rental income for tax purposes, you can deduct the interest on the mortgage used to purchase, improve or repair the rented property.  Prior to 2019, the mortgage interest amount was restricted.  It is important to note that the tenancy must be registered with the Residential Tenancies Board in order to qualify for this relief.

What if I don’t live in Ireland?

Regardless of where you live, if you own property in Ireland and make a profit from renting it out, you will be subject to taxation.  Even if you make a loss on your rental income, you must declare it to the Revenue Commissioners of Ireland.

If you are classified as a non-resident landlord, you are obliged to nominate a Collection Agent, this can be a professional person or a family member.  A Collection Agent will take on the responsibility to make annual tax returns to the Revenue Commissioners on behalf of the non-resident landlord.  Alternatively, your tenants are expected to withhold the income tax and pay it directly to Revenue on your behalf.  For example, the standard rate of income tax is 20%, so the tenant would pay 80% of their rent to you, and 20% to the tax office.

If you’d like to know more about using a collection agent, or need advice on filing your rental income tax return, read our Non-Resident Landlord Guide to Irish Tax Returns.

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