Renting out property in Ireland can be a great way to generate additional income. However, as a landlord, you have important tax obligations that must be properly handled. Calculating how much tax you’ll owe on rental profits involves several considerations. Here’s what landlords need to know about paying tax on rental income in Ireland:
What is the rental income tax rate in Ireland?
The tax rate on rental income in Ireland up to the standard cut-off rate is 20%. Any rental income above this threshold is taxed at 40%. The standard rate cut-off for a single person in 2024 is €42,000. For married couples or civil partners, it’s €51,000.
In addition to income tax, you’ll also owe PRSI (Pay Related Social Insurance) of 4% and USC (Universal Social Charge) of 0.5-8% on rental profits. The exact USC rate depends on your total income amount for the year.
What expenses can I deduct from rental income?
Allowable deductions that reduce your taxable rental income include:
- Maintenance and repairs
- Mortgage interest
- Insurance premiums
- Management fees
- Utility bills
- Advertising costs
- RTB registration fees
- Accounting fees
You must have documentation to substantiate the expenses claimed. Capital allowances can also be claimed on furnishings over 8 years.
When is rental income tax due?
For self-assessed taxpayers, tax on rental income is due by 31 October each year. This is also the deadline for submitting your annual return. If your total Irish-sourced income exceeds €5,000 you must file Form 11.
Can I reduce my tax bill as a non-resident landlord?
Non-resident landlords also pay income tax on Irish rental profits. One way to lower your tax liability is to appoint an Irish collection agent to handle taxes. Alternatively, tenants can deduct basic rate income tax from rent paid directly to them. As a non-resident, you can offset this against your final Irish tax bill.
Property Manager Ireland – KPM
As one of Ireland’s leading property management companies, KPM has over 10 years of experience helping landlords maximise their rental income and comply with all tax obligations. Our nationwide team of experts provides a comprehensive range of services, including:
- Finding quality tenants
- Preparing RTC leases
- Managing maintenance issues
- Handling RTB registrations
- Collecting rent payments
- Filing required tax returns
- Issuing annual statements
KPM’s dedicated accountants have in-depth knowledge of Ireland’s tax rules for rental income and expenses. We take care of all filings and documentation to ensure landlords claim their full deductions and pay the lowest legal tax amount.
To learn more about our stress-free approach to property management in Ireland, contact KPM today. Our experienced staff are always happy to answer your questions and provide tailored solutions that meet your individual needs.
