Tax on rental income in Ireland

In Ireland, rental property tax laws require non-resident and resident landlords to report their rental income
and pay tax on their profit (after allowable deductions).

The tax rate you pay will depend on your total income and personal circumstances. Each year, individuals are
required to evaluate their tax situation through the self-assessment process.

Landlords who receive rent from tenants must assess their income tax position and report it to Revenue by
filling out a property tax return in Ireland.

The deadline for filing and completing this task is 31 October every year.

If you’re a PAYE earner and your rental income is under €5,000, you must submit a Form 12 return.

If you are an Irish resident who rents a room in your main home and lives with the tenant, you can claim
rent-a-room relief on your rental tax return, allowing you to earn up to €14,000 tax-free. However, if you make a
rental profit, you must calculate and pay income tax.

If you move abroad and rent out your Irish residential property, additional tax reporting is needed.

Non-resident landlords must choose whether they would like their tenant to withhold a portion of the rental
income for Revenue, or they must appoint a collection agent to manage their taxes.

Tax on rental income for non-resident landlords in Ireland

Non-Resident Landlord Withholding Tax (NLWT) System

Non-resident landlords in Ireland have two choices for handling tax on rental income.

One option is to appoint an Irish-based “collection agent” to handle Irish tax filing (PTI Returns provides
this service to non-resident landlords).

Alternatively, tenants can deduct the rental income tax (20% rate) from their rent and pay it directly to
Revenue on the landlord’s behalf.

The landlord can later claim this as a credit when filing their property tax return. In either case, it’s
crucial to note that the rental tax return must be filed with the liability paid by 31 October each year.

irish rental tax return
If you’re not using a Rent Collection Agent and your tenants are paying your rental
income tax, don’t forget to collect the filled-out Form R185 from them. You’ll need this form to claim the
payment.If you make more than €5,000 from your property (after deducting expenses), you must register for
self-assessment and report your rental income using Form 11.If your rental income is less than €5,000, there’s a different way to report it as non-PAYE income. Landlords can be reimbursed for common expenses when calculating rental profit. They might also qualify for a
portion of personal allowances. A tax professional from our team can guide you through all the tax details.

What tax do you pay on rental income in Ireland as a resident?

Landlord tax is typically calculated on the gross rental income, minus allowable expenses.

If you’re a resident landlord and your total income, including rent, is less than €40,000, you’ll face a 20%  tax rate on rental income.

On the other hand, if your income surpasses €40,000, the part above that limit incurs a 40% income tax, along
with a potential 4% charge for Pay-Related Social Insurance (PRSI).

It’s crucial to remember that you’re also obligated to pay the Universal Social Charge (USC)
on your rental income.

What tax do you pay on rental income in Ireland as a non-resident
landlord?

Individual non-resident landlords tax rate in Ireland:

20% on the first €40,000 of gross rental income, and 40% on any remaining gross rental income.

Company non-resident landlords tax rate in Ireland:

25% of gross rental income. 

What Expenses can be claimed?

Fortunately, both resident and non-resident landlords have the opportunity to claim various expenses against
their total gains to reduce their tax bills. These allowable expenses include:

  • Management fees
  • Utilities, refuse, and other service charges
  • RTB registration fees
  • Insurance premiums
  • Advertising expenses
  • Maintenance costs
  • Wear and tear

It’s important to note that you’ll need to furnish evidence for each deduction when filing your return.

Therefore, it’s crucial to diligently retain all documentation related to expenses associated with your rental
properties. For further information on allowable expenses for landlords, explore more details here.

Budget 2024: rental income tax relief

In the 2024 budget, there’s a temporary tax relief for rental income aimed at supporting private landlords.

This relief, applicable at the standard rate of 20%, will be in effect from 2024 to 2027.

To qualify, you must keep the rental property on the market for the next four years.

The relief amounts to €3,000 in 2024, €4,000 in 2025, and €5,000 in 2026 and 2027, providing potential tax
reductions of up to €600, €800, and €1,000, respectively.

However, if you exit the rental market during this period, the relief will be reclaimed.

Undeclared rental income in Ireland

Undeclared rental income in Ireland is considered tax evasion and can have serious consequences for landlords.

Landlords who fail to declare their rental income are liable to pay back taxes, interest on the unpaid taxes,
and penalties. In some cases, they may also face criminal prosecution.

In addition to the risks outlined above, undeclared rental income can also lead to several other problems for
landlords.

For example, landlords who undeclared rental income may not be eligible for certain tax credits or benefits.
They may also find it difficult to obtain loans or mortgages.

If you are a landlord in Ireland and you have undeclared rental income, it is important to come clean to
Revenue as soon as possible.

Taxes you need to pay when buying property in Ireland 

If you’re buying residential property in Ireland there are various taxes you need to be aware of:

Stamp Duty

Stamp duty is a tax in Ireland that you pay when transferring property ownership.

When you buy property in Ireland, you’ll sign a document that transfers ownership to you.

Afterwards, you need to:

– Fill out a Stamp Duty Return for this document

– Pay Stamp Duty for this document

Irish property can be:

– Land

– Buildings (residential like houses or apartments, and non-residential like offices or factories)

– Business assets (like goodwill)

– Shares in Irish companies

Stamp Duty Rates

For residential properties, the rate is 1% on the first €1 million and 2% on any amount exceeding €1
million.

For new builds, the stamp duty is based on the home’s value minus the 13.5% VAT. If you’re purchasing a new
home for €300,000, you’ll owe is €2,595.

Our tax advisors can assist you with Stamp duty for your Irish property.

VAT

In Ireland, a VAT rate of 13.5% applies to new builds. If you buy a new residential property within five
years of completion, and it hasn’t been occupied for at least 24 months, you’ll also incur a 13.5% VAT
charge.

No VAT applies to second-hand residential properties in Ireland.

In Ireland, a VAT rate of 13.5% applies to new builds. If you buy a new residential property within five
years of completion, and it hasn’t been occupied for at least 24 months, you’ll also incur a 13.5% VAT
charge.

No VAT applies to second-hand residential properties in Ireland.

 

irish landlord tax return service

Local charges

Local charges apply for services such as refuse collection and water. These are set by the Local Council /
Corporation and vary according to the location.

Local property tax (LPT)

Local property tax in Ireland is based on the value of the residential property. New properties are exempt from
this.

The LPT you pay is based on your property’s market value, which is the highest price it could sell for on the
open market.

When buying a property, make sure to get the LPT property ID and valuation from the seller. Also, confirm that
all LPT returns and payments are filed and up to date.

Capital gains tax in Ireland

In Ireland, capital gains tax (CGT) is applicable when you sell or dispose of a property, and it is calculated
on the profit or gain made from the sale, applying to both resident and non-resident landlords.

The rate of Capital Gains Tax on property in Ireland is generally 33%. This tax is imposed on the difference
between the sale price of the property and its original purchase price, with certain allowable deductions.

Individuals are required to report and pay Capital Gains Tax on property to Revenue in Ireland within a specific
timeframe after the sale or disposal.

Property owners need to be aware of the applicable exemptions, reliefs, and deductions to optimize their tax
liabilities. Additionally, the specific rules and rates may be subject to change, so it’s advisable to consult
with a tax professional.

Our tax advisors can help you pay your Capital Gains Tax in Ireland.

Request a free callback from a tax advisor

+353 1 635 3722

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Irish tax services

As a registered tax agent with the Revenue Commissioners of Ireland, Property Tax International (PTI
Returns)
can provide a comprehensive list of services for both resident and non-resident landlords in
Ireland.

Our Kilkenny and Dublin-based teams of Irish tax advisors are available throughout the process to answer any
questions you have about your rental tax return in Ireland. PTI Returns provides:

  • Irish PAYE Rental Tax Returns
  • Irish Self-Assessment Income Tax Returns
  • Stamp Duty payment
  • Irish Capital Gains Tax services
  • Irish Foreign rental figure conversion
  • Irish Preliminary Tax Calculation
  • Irish Capital Acquisition Tax services

irish tax return services

When you register with PTI Returns, we’ll provide you with a dedicated tax professional to organize all
the services that you require.

Request a free callback from a tax advisor

+353 1 635 3722

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FAQs

  • In what circumstances do I need to file an Irish tax return?
  • Both residents and non-residents will have a filing requirement if they receive any income
    that falls outside the PAYE system, for example, rental income from either domestic or international
    sources.
    The amount you earn and from what sources will determine if you have to file Form 11, Form 12, Form CG1,
    or Form IT38.*A chargeable person is someone who is in receipt of income liable to tax under the PAYE
    system and is also in receipt of gross non-PAYE income of €30,000 or more from other sources, such as
    trading or rental income, etc. Even if your gross income is less than €50,000 you also will be regarded as
    a chargeable person if your net income (after deduction and allowances) is more than €5,000 net. Also note
    that if your gross income has been reduced to nil or a negligible amount because of deductions, losses,
    allowances, and other reliefs you will be still regarded as a chargeable person.
  • Who should file a Form 11 tax return?
  • Form 11 will be required for any individual who is deemed to be a chargeable person.
    Self-assessment customers are required to file Form 11 which is mandatory for individuals with significant
    income from non-PAYE sources.
    In general, most PAYE workers are not required to file a Form 11, but are required to do so in certain
    circumstances where the non-PAYE income received is more than €30,000 gross per annum or greater than
    €5,000 net per annum. Company directors who own more than 15% of a company (i.e. proprietary directors)
    will have to file a Form 11, even if the majority of their income comes from the PAYE system. You will
    also be regarded as a chargeable person if you open a foreign bank account, acquire a foreign life policy,
    or have a material interest in an offshore fund or exercise share options.
  • When is the deadline for filing Form 11 with Revenue?
  • The deadline is 31 October in the year following the tax year to which the return relates
    (i.e. for the 2023 tax year, the return is due on 31 October 2024). An extension of approximately two
    weeks is granted for online filing via Revenue’s Online System (ROS).
  • When do I need to file a Form 12 tax return?
  • A Form 12 tax return is completed by those whose primary source of income comes from PAYE
    income. In general, most PAYE workers do not have to complete Form 12 as they do not meet the criteria
    required to file a tax return. Revenue may also randomly select PAYE workers and issue a Form 12 for
    completion regardless of their income threshold.
    People with an income of up to €5,000 net income and €30,000 gross income per annum from non-PAYE sources
    should also complete a Form 12. If the non-PAYE income is above this amount, a Form 11 tax return will
    have to be submitted.
  • What happens if I do not make a tax return?
  • Failing to comply with tax laws can lead to late filing penalties of either 5% or 10% and
    interest accruing on any outstanding tax liabilities. The severity of the penalty will depend on several
    factors, such as the amount of tax owed, the time delay between the tax return being submitted, and the
    actual due date of submission.
  • I’m recently married and want to know when my Irish tax credits change.
  • When a couple first marries they continue to be taxed as two single individuals under the
    Irish tax system. If the tax paid by both individuals is higher at the end of the year than if they were
    taxed as a married couple, a tax refund will be due. An Irish tax refund would occur in this instance
    where one spouse was on a different tax rate than the other and there were unused tax credits as a result
    of the new union.
  • What is joint assessment/aggregation for a married couple in Ireland?
  • The most common form of taxing married couples in Ireland is a joint assessment which is
    generally the most beneficial financially. One spouse will assume responsibility for the joint tax
    liability and is generally referred to as the ‘assessable spouse’. The other spouse is referred to as the
    ‘non-assessable spouse’.

    The Assessable Spouse:

    1. Will have their combined income assessed for Irish tax purposes.
    2. Receives standard tax rate banks and combined tax credits.
    3. Is required to file a joint Irish tax return and include all details about the couple’s
      combined income.
  • Can a married couple split their tax credits?
  • Yes, the married couple can elect to have their tax relief and tax credits split between them,
    but it should be noted that employment expenses and PAYE tax credits are not eligible for transfer.
  • Can a married couple continue to be taxed individually after they marry?
  • Yes, a married couple can choose to be taxed separately and file separate Irish tax returns if
    required. This is known as ‘separate assessment’.

    Under this method following credits are equally divided between spouses:

    • Married Personal tax credit
    • Age tax credit
    • Blind tax credit
    • Incapacitated Child tax credit

    Where there are unused credits or standard rate bands (other than the Employee tax credit and Employment
    expenses or the increase to the standard rate band) this can be transferred to the other spouse in the
    following tax year.

  • My accountant includes the rental income I receive from my overseas property on my
    resident tax return but I don’t file any returns overseas. Is this ok?
  • This is a common situation that we are seeing more and more of lately. From your resident
    country’s point of view, this is perfectly fine but there are two situations here that should be noted:

    • Firstly, when you include your foreign rental income with your annual resident tax
      return, there are often several deductions that are not included as each tax system has its own rules
      and regulations. Unless the person preparing your resident return is familiar with the foreign tax
      system and speaks the language, they will not know what costs can be written off. This is also the
      most inefficient tax method for declaring your income as, in addition to the above you will also be
      subject to income tax which in many cases can be above 40%.
    • Secondly, while the above situation will meet your tax obligations in your resident
      country, you may not meet your tax obligations in the overseas country, which can leave you exposed to
      the possibility of fines, penalties, and interest being imposed by the foreign tax office.

    If you receive rental income abroad, your first obligation is to the tax authorities where the income was
    received. The main objective of any tax return is to reduce your taxable income by as much as possible.
    Once the taxable income is determined, tax is paid based on the income tax rate applicable to
    non-residents (if different than the resident income tax rate).

    If a tax liability is due, a payment is made to the tax office. It is at this point that the Double
    Taxation Agreement (if available) would come into force which would ensure that you do not pay tax twice
    on the same income.

    Declaring income in the overseas country first is the most tax-efficient way of ensuring your taxes are in
    order. PTI Returns can provide more advice on this if you’re unsure of your obligations.
    We can help you stay tax-compliant across multiple jurisdictions.

  • What is Separate Treatment for a married couple?
  • Separate treatment or Single Treatment is not to be confused with Separate Assessment. Under
    separate treatment, each spouse is considered an individual and is taxed under the same method as a single
    taxpayer.

    Under this method each spouse:

    1. Has an obligation to file a personal Irish tax return.
    2. Is assessed on his/her income.
    3. Is treated as a single person and therefore receives the equivalent tax credits and
      rate bands as a single taxpayer.
    4. Has no right to claim relief for payments made by the other spouse.

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Tax Rates and Deadlines

Tax Rates and Deadlines
1 January  – 31 December
Income Tax Rate
20% – 40%
Universal Social Charge (USC)
0.5% – 8%
Capital Gains Tax
Capital Gains Tax is payable on any increase in value since acquisition at 33%.
The gain is calculated on the difference between the sale price and the price of acquisition adjusted
by an inflation index.
Inheritance Tax
Irish Inheritance Tax is payable by both resident and non-resident beneficiaries
on certain transferred assets including property. Exemption thresholds are depending on the
relationship between the donor and the beneficiary. The remaining taxable value over the relevant
threshold is taxed at 33%.
Income Tax Deadline
31st October
Dual Tax Agreement with the UK
Yes

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Irish Property Tax Return Services & Fees

Property Tax International (PTI Returns) provides professional support for resident and
non-resident landlords in Ireland. Our services ensure a smooth and straightforward process for filing your
annual rental tax returns.

Our tax advisors offer assistance across a wide range of services, including:
– Irish PAYE Income Tax Returns

– Irish Self-Assessment Income Tax Returns

– Stamp Duty payment

– Irish Capital Gains Tax services

– Irish Foreign rental figure conversion

– Irish Preliminary Tax Calculation

– Irish Capital Acquisition Tax services

With our in-depth understanding of local tax laws, we strive to reduce your tax liability by ensuring you take
advantage of all entitled reliefs.

Our pricing packages are based on the complexity of your situation. To make things clear from the beginning,
we’ve created the following fee structure to cater to different levels of complexity.

  • Additional fees apply for the following items:
  • Self-employment income:
  • Bank interest

Additional property tax services:

  • Capital Gains Tax Computation + CG1 return
  • Claims for reliefs:
Notes:The above fees are VAT-inclusive.
* Starting fee is subject to the volume of work involved. This applies to processing receipts and invoices
for self-employed individuals such as sub-contractors and farmers.
** Strictly applied where clear documents have been provided and no calculation is needed to arrive at a
taxable position.

Learn more about property income taxes in Ireland.

Request a callback from a tax advisor

+353 1 635 3722

When you apply through this contact form:

  1. A tax professional will contact you
  2. After specifying with you the services you need and the tax documents required, you will receive
    information regarding our final fees
  3. Before we can start work on your tax return, we will need you to share the necessary property
    information and tax documents with our team