Irish rental income
What expenses are allowed?
You can claim certain expenses against your rental income to reduce the amount of tax you will have to pay.
Allowable expenses include:
- rates you pay to a local authority for the property
- rents you pay for property such as ground rents
- insurance premiums against fire and public liability
- maintenance of your property such as cleaning, painting and decorating
- property fees before you first rent out your property such as management, advertising, legal or accountancy fees
- cost of any service or goods you provide that are not repaid by your tenant (such as electricity, central heating, telephone, service charges, water and refuse collection).
- certain mortgage protection policy premiums
- expenses in between renting out the property in certain circumstances
- capital allowances
- repairs, such as rot treatment, mending windows, doors or machines
- certain pre-letting expenses on vacant residential property
- the cost of registering with the Residential Tenancies Board (RTB).
You must keep full and accurate records of all expenses for each property you rent out.
You may partly let a premises. You can only claim the portion of the expenses related to the part of the property that is let. For example if half the rooms are let, then half of the expenses can be claimed.
The receipt of rent is treated as the carrying on of a trade. Expenses are only allowed to the extent that they would be allowed for that trade.
You may be allowed claim Mortgage Interest Relief against your rental income. The interest must be from a mortgage that is used to purchase, improve or repair your rental property.
You can claim Mortgage Interest Relief if you are registered with the Residential Tenancies Board (RTB):
- while your property is rented out
- in between renting out the property as long as you do not live in it during that time.
You cannot claim Mortgage Interest between the time you buy the property and the time you first rent out the property.
Mortgage Interest Relief is restricted to a percentage of the interest as follows:
|interest accrued on or after 7 April 2009 to 31 December 2016
|interest accrued from 1 January 2017 to 31 December 2017
|interest accrued from 1 January 2018 to 31 December 2018
|interest accrued from 1 January 2019
For the purposes of the restriction, interest is treated as accruing on a daily basis. The date the loan is taken out is not relevant.
In certain situations, you may be able to claim 100% mortgage interest relief in the years when the relief was restricted. To qualify you must have:
See the manual Part 04-08-06 for more information on the deduction of Mortgage Interest.
See the manual Part 04-08-10 for more information on registering tenancies with the RTB.
You can claim capital allowances on the cost of furniture and fittings in your property. This is known as ‘wear and tear allowances’ or ‘depreciation’.
The current rate for these allowances is 12.5% of the cost per year, for a maximum of eight years. The allowances may include:
- furniture you purchased for your rental property
- the cost of the purchase of white goods such as a fridge or a dishwasher.
- Example 1
You purchased a suite of furniture for €1,000. The wear and tear allowance of 12.5% for this is €125 per year.
You can claim this against the rental income for the next eight years.
- Example 2
You let two furnished houses. The furnishings cost €2,400 in House One and €8,000 in House Two.
Your wear and tear allowances are €1,300 (€2,400 @ 12.5% + €8,000 @ 12.5%).
You can claim this against your total rental income for the next eight years.
Next: What expenses are not allowed?