- Types of Rental Income
- Allowable Deductions
- Rent a Room Relief
- Additional Information
- Reference Material
Types of Rental Income
Rental income derives from a number of sources including:
- the letting of property, e.g. houses, flats, apartments, offices and farmland,
- easements, e.g. payments for the right to erect advertising signs, communication transmitters or for the grant of a right of way,
- the granting of sporting rights, such as fishing and shooting permits,
- payments made by a tenant to defray the cost of work of maintenance or repairs to the premises, which is not required by the lease to be carried out by the tenant,
- certain premiums, including deemed premiums and reverse premiums. See How are premiums on leases treated for tax purposes?, in Revenue Guide to Rental Income for additional information,
- conacre letting (see Part 04-08-05 (PDF, 18 KB) of the Income Tax, Capital Gains Tax and Corporation Tax Manual),
- service charges in respect of services ancillary to the occupation of property,
- insurance recoveries under policies providing cover against non-payment of rent.
A person may claim a deduction from gross rent for legitimate property related expenses as follows:
- Ground Rent
- General Repairs (Capital Expenditure excluded)
- Management Fees: paid to an agent e.g. rent collection
Note: Landlords may not claim for their own labour.
- Service charges (water/refuse etc.)
- Advertising for tenants
- Accountants fees for preparing rental accounts
- Wear and Tear - Depreciation of furniture from a dwelling and fittings at the rate ofis 12.5% per year over 8 years.
- Interest - The deduction for interest accruing on loans used to purchase, improve or repair rented residential property is restricted to 75% of the interest accruing.
An individual who lets a room (or rooms) in his or her sole or main residence as residential accommodation may be exempt from income tax in respect of income from the letting where the aggregate of the gross rents and any sums for meals or other services supplied in connection with the letting does not exceed the threshold for the year in question. Please refer to IT 70 - A Revenue Guide to Rental Income for further information on this relief.
- Rents outside the State - Rental income arising outside the State is chargeable to tax under Schedule D Case III.
- Pre-letting Expenditure - No relief is due for pre-letting expenditure except for auctioneers letting fees, advertising fees and legal expenses incurred on first lettings.
- Rent paid to non-resident landlord - If the rent is paid to an agent acting on behalf of a landlord, the agent is assessed on the rent.
- C.G.T. - If let property is sold a liability to C.G.T may arise.
If however the rent is paid to a landlord abroad or to an account on their behalf, the tenant must deduct tax at the standard rate from the payments and remit that tax to Revenue.
- Leaflet IT 70 - A Revenue Guide to Rental Income
- Income Tax Capital Gains Tax Corporation Tax Manual, Part 4 (Principal Provisions relating to Schedule D Charges)
- Income Tax Capital Gains Tax Corporation Tax Manual, Part 45 (Persons Chargeable in Representative Capacity)