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Tax on Rental Income: What every landlord should know

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Are you feeling a bit lost when it comes to tax on your rental income? We get it—it can be pretty confusing trying to figure out what you can claim and how to stay tax compliant. Whether you’re a seasoned landlord or just starting out, keeping track of everything can feel like a lot. But don’t worry! We’re here to break it down and make it easy, so you can focus on what really matters—making the most of your rental property without the tax headaches.

In this blog post, we’ll cover everything you need to know about tax on rental income, including:

How is rental income taxed?

Rental income in Ireland is taxed just like other income, meaning it can be taxed at either the 20% standard rate or if you’re in a higher bracket, the 40% rate. As a landlord, you can claim certain costs—like repairs and your mortgage interest—against your rental income, helping to lower your tax bill. If you’re renting from abroad, the rules change slightly. You’ll need someone in Ireland (a “collection agent”) to handle the tax payments for you.

Lastly, don’t forget to register each tenancy with the Residential Tenancies Board (RTB). It’s a legal requirement and also essential for claiming key deductions like mortgage interest relief. While it might seem like a hassle, getting this done is important for keeping your landlord tax as low as possible.

What expenses can I claim against rental income?

Knowing what expenses, you can claim is key. You can deduct several expenses from your rental income, which can help reduce your taxable amount.

Here are some of the main expenses you should keep in mind:

  • Maintenance and repairs: You can deduct costs for maintaining your property, like fixing a leaky tap or repainting the walls. Just keep in mind that larger renovations, such as adding a new kitchen, typically can’t be deducted right away.
  • Mortgage interest: If you have a mortgage on your rental property, you can claim back up to 100% of the interest you pay on that loan, as long as your property is registered with the Residential Tenancies Board (RTB). This can help reduce your landlord tax.
  • Insurance: The money you spend on property insurance, including landlord insurance, can also be deducted. This covers things like fire, theft, and liability, which protect you from losses.
  • Professional Fees: The fees relating to the rental property charged by Accountants for rental tax returns, Letting Agents and Property Management Companies are all allowable tax deductions against your rental income.

How much rent can you earn before you pay tax?

You have to pay tax on all rental income, no matter how much you earn. There’s no minimum amount that’s tax-free, so even small amounts of rental income need to be reported. Knowing this can help you plan for the tax you’ll owe.

Renting out an entire property

If you’re renting out an entire property, the income you earn is fully taxable. There’s no specific tax-free limit for this scenario, so you’ll need to pay tax on any rental income you receive. But you can still claim expenses against this income, like maintenance and mortgage interest, to reduce your taxable amount.

Renting out a room in your home on a long-term basis

If you’re renting out a room in your home (where you live) on a long-term basis, you can earn up to €14,000 per year tax-free under the rent-a-room relief scheme. This is a great option for homeowners looking to supplement their income. Just remember, this scheme applies only if the room is rented out for more than 28 days and the room is physically attached to the main property.

Renting out a room in your home on a temporary or short-term basis

When it comes to short-term rentals, like those on Airbnb, you can’t use the rent-a-room relief scheme. This means that any income you earn from renting out a room on a short-term basis is fully taxable.

What tax relief can you get on rental income (2024–2027)?

A temporary rental income tax relief was introduced in 2024 called the Residential Premises Rental Income Relief (RPRIR). The relief will be available against some rental income at the standard rate of 20% each year.

The Tax Credit is available to both resident and non-resident landlords as long as the property is registered with the Residential Tenancy Board (RTB), the Local Property Tax is paid, and the landlord’s tax affairs are up to date with a valid tax clearance certificate.

The credit will be available from 2024 to 2027 and will only apply if the landlord keeps their rental property in the rental market for the 4 years.

Landlords can get 20% of:

  • €3,000 for 2024
  • €4,000 for 2025
  • €5,000 for 2026 and 2027

The relief will reduce the tax due on rental income by up to €600 in 2024, €800 in 2025, and €1,000 in 2026 and 2027. The relief will be clawed back if the landlord leaves the rental market during this time.

What non-resident landlords and Irish landlords abroad need to know about taxes

Navigating tax laws can be tricky, especially if you’re a non-resident landlord.

Here’s what you need to know about your tax obligations, collection agents, and how double taxation agreements may affect you.

Tax obligations for non-resident landlords in Ireland

If you’re renting out property in Ireland but live outside the country, you’re still liable for income tax on your rental earnings. You’ll be taxed at the standard rates, which means you’ll need to report your rental income to Revenue. Non-resident landlords typically pay tax on their rental income at a flat rate of 20% up to a rental profit of €13,000. However, you can claim expenses to reduce your taxable income, just like resident landlords.

Appointing a collection agent for Irish rental income

As a non-resident landlord, you must appoint a collection agent if you want to avoid having your tenants withhold 20% of the rent for tax purposes. This agent, who must be based in Ireland, will handle tax payments on your behalf. It’s an essential step to ensure compliance and keep your tax responsibilities in check, making life easier when it comes to managing your rental income. Tax Return Plus offer a unique Collection Agent Service to Non-Resident Landlords. 

Double taxation agreements and their impact on non-resident landlords

These agreements between Ireland and other countries help prevent you from being taxed on the same income in both countries. Depending on your home country, a DTA might allow you to offset some or all of your Irish tax liabilities against tax in your country of residence. It’s important to check the specifics of these agreements, as they can vary, and understanding them can help you save money on your tax bill.

Do I pay income tax on properties owned abroad?

The short answer is yes—Ireland taxes its residents on their global income, which includes any rental income from foreign properties.

Here’s a quick rundown of what you need to know about declaring this income.

As an Irish resident, you’re required to declare income from all sources, no matter where in the world they’re earned. This includes rental income from properties you own abroad. Even if you’re paying tax on the rental income in the country where the property is located, the Revenue still expects you to report that income here in Ireland.

Ireland has double taxation agreements with many countries, which can prevent you from being taxed twice on the same income. If you’ve paid tax in the country where the property is located, you may be able to claim a tax credit here in Ireland to offset the amount due. This helps ensure that you’re not paying full taxes twice on the same rental income, making the tax impact a bit lighter.

How to declare foreign rental income?

You’re required to declare rental income on your annual tax return. If your net rental income is under €5,000, you can use a Form 12. If net rental income including foreign rental is over €5,000 it has to be declared by a Form 11 income tax return. In most cases, given the current market, net rental income does exceed € 5,000, therefore a Form 11 is required.

Struggling to figure out how to declare your foreign rental income?

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Do I have to pay tax if I rent to a family member?

Yes, rental income received from a family member is still considered taxable income and must be reported on your tax return. This income is treated the same way as rental income from any other tenant, meaning you’ll need to declare it and pay income tax based on your total rental earnings for the year.

It’s important to document your rental arrangement with a family member, just like you would for any other tenant. Having a written agreement makes the rent amount, payment schedule, and terms clear, which can be helpful if Revenue ever needs proof of the arrangement.

Is there a tax deadline for my rental income?

Yes, for most landlords, the deadline for submitting a self-assessment tax return (Form 11) and paying any tax due on rental income is October 31 of each year for paper returns. If you’re filing online through Revenue’s Online Service (ROS), you typically get an extension to mid-November (exact dates can vary each year).

If you miss these deadlines, Revenue may apply penalties and interest charges on any unpaid tax. These penalties can add up quickly, so it’s important to meet the deadline to avoid extra costs. Late submissions can incur a 5% to 10% penalty, plus daily interest until the tax is paid in full.

How to claim rental expenses with Tax Return Plus?

At Tax Return Plus, claiming your rental expenses is simple and stress-free. Our experts know exactly which landlord deductions—like mortgage interest, repairs, and management fees—will help you save the most, and we make sure you claim every eligible allowance to maximise your income. We handle all the paperwork and deadlines, so you can skip the hassle and avoid costly penalties. We make tax season easy, accurate, and tailored just for you, ensuring your return is fully compliant and your experience worry-free. Contact us today!

FAQs about rental income

Which costs can I not claim as an expense against rental income?

You cannot claim personal expenses, such as mortgage repayments. Also, you can’t deduct costs for big improvements that add value to the property, like renovations or extensions. These are known as enhancement costs which do help lower any potential Capital Gains Tax liability should you sell the property at a gain.

Do you pay tax on Airbnb income in Ireland?

Yes, rental income from Airbnb and other short-term rentals is subject to tax in Ireland. This income must be declared on your annual tax return, just like any other rental income.

Is local property tax (LPT) deductible for rental income?

No, Local Property Tax (LPT) is not deductible against rental income in Ireland.

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