Home   Property   Rental income  

Irish rental income

  1. Overview
  2. What expenses are allowed?
  3. What expenses are not allowed?
  4. How do you calculate your taxable income?
  5. Rental profit and losses
  6. Tax incentive schemes for rental income
  7. Premiums on leases
  8. How do you declare your rental income?

How do you calculate your taxable income?

The rate of tax you will pay on your Irish rental income will depend on your:

You can find further details in the Calculating your Income Tax section.

Your net rental income is your gross rental income less your allowable deductions or expenses. This determines if you have a profit or a loss.

Once you have determined what your net rental income is, you need to then determine what rate of tax you must pay on your total income. You must allow for any tax you have already had deducted through other sources such as PAYE.

  • Example 1

    Deirdre rents a property in Ireland to a tenant for €1,300 per calendar month.

    Deirdre's rental income and allowable expenses
     ValuesAmounts
    Gross rental income   €15,600
    Insurance €850  
    Maintenance (painting and decorating) €950  
    Registration fee (Residential Tenancies Board) €90  
    Allowable mortgage interest (€2,100 @ 100%)  
    Repairs €1,800  
    Total allowable expenses   €5,790
    Net rental profit   €9,810

    Deirdre is single and had no other source of income in the year ended 31 December 2020.

    In 2020, the standard rate of tax for a single person was €35,300. As Deirdre's total taxable income for 2020 was €9,810, her rental income will be taxed at the standard rate of tax of 20%.

    Deirdre's tax and credits
      Amounts
    Net taxable rental income €9,810
    Tax due on net rental profits at standard rate of tax €1,962
    Less personal credit €1,650
    Total tax due €312

     

  • Example 2

    Gerard rents a property to a tenant for €850 per month. His gross rental income for the year ended December 2021 was €10,200.

    Gerard's rental income and allowable expenses
      ValuesAmounts
    Gross rental income   €10,200
    Insurance €960  
    Capital allowances €81 (€650 @ 12.5%)  
    Registration fee (Residential Tenancies Board) €90  
    Allowable mortgage interest €600 (€600 @ 100%)  
    Repairs €420  
    Total allowable expenses   € 2,151
    Net rental profit   €8,049

    Gerard is married and also had PAYE income amounting to €38,200 in the year ended 31 December 2021. His wife, Laura, has no additional income. They are jointly assessed.

    In 2021, the standard rate of tax for a married person was €44,300. As Gerard’s total income for 2021 was €46,249, the first €44,300 is taxable at 20%, with the balance taxable at 40%.

    Gerard's tax and credits
      ValuesAmounts
    PAYE income €38,200  
    Total taxable rental income €8,049  
    Total taxable income   €46,249
    Income taxed @ 20% €44,300 €8,860  
    Income taxed @ 40% €1,949 €779.60  
    Gross tax   €9,639.60
    Less married person credit €3,300  
    Less Employee Credit €1,650  
    Total tax credits   €4,950
    Total tax due   €4,689.60

    To work out how much tax Gerard's owes on just his rental income, he will have to deduct the tax due on his PAYE income and tax credits from the total tax due.

    Calculate tax due on just rental income
      Values Amounts
    Tax on PAYE income (€38,200 x 20%) €7,640  
    Less tax credits €4,950  
    Tax due on PAYE income   €2,690
    Tax payable on Rental Income
    (total tax due €4,689.60 - €2,690)    		   €1,999.60

     

Next: Rental profit and losses

Published: 26 January 2024 Print this page

Back to homepage Back to top