Non-resident landlords

If a tenant withholds tax

Where no collection agent has been appointed by the non-resident landlord, tenants must withhold 20% tax from the total rent. This obligation remains unchanged with the new Non-Resident Landlord Withholding Tax (NLWT) system. However, the tenant’s procedure to account for 20% tax has changed.

Tenants renting from a non-resident landlord

Obligations pre-June 2023 

If you do not engage a collection agent, your tenant must withhold the tax due from the rent. Your tenant must:

1. Deduct 20% of the total rent due and complete Form R185.
2. Send the payment, and a copy of the completed Form R185, to Revenue.
3. Pay you the remaining 80% of rent due and send you the original completed Form R185.
4. Account for the tax immediately after it is deducted. Your tenant can do this by:
   • sending the tax deducted to Revenue's Collector-General's Division over the course of the year
   • having the tax collected over the year by adjusting their tax credits, if their only income is from Pay As You Earn (PAYE) income
   • or
   • sending the tax deducted from the rent when filing their Income Tax Return. A PAYE only taxpayer will need to submit a Form 12 Income Tax Return. A self-employed taxpayer (a chargeable person) will need to submit a Form 11 Income Tax Return.

If your tenant deducts the tax on the payment of rents, it does not make them a chargeable person. The tax that is required to be deducted and paid cannot be offset against your tenant’s own Income Tax liability.

The non-resident landlord can claim the withheld tax as a tax credit on their Income Tax Return. This can be done if all obligations are met, and the correct tax is deducted and remitted to Revenue by the tenant.

Form R185 is no longer used for the purposes of claiming credit for tax withheld on rent payable to a non-resident landlord. It should not be submitted in respect of rents paid after 30 June 2023.

Obligations since 1 July 2023 - NLWT system

If you do not engage a collection agent, your tenant must withhold the tax due from the rent. Your tenant must:

1. Deduct 20% of the total rent due.
2. Remit the 20% payment to Revenue by submitting a Rental Notification (RN) on the NLWT system. Tenants can give the non-resident landlord a PDF acknowledgement of the RN as a record of the tax deducted.
3. Pay the remaining 80% of rent due to the non-resident landlord.
4. Provide certain information concerning the non-resident landlord, such as the rental property. 

For further information, please refer to the Tax and Duty Manual Part 45-01-04a, “Non-resident Landlord Withholding Tax”.

Tenants paying directly to a non-resident landlord post 1 July 2023:

• will not be designated as chargeable person,
• will not be responsible for accounting for the withholding figure of 20% on their personal tax return,
• will not be permitted to adjust their tax credits to pay the 20% withheld tax due
• and
• will withhold and remit 20% of the rental payment, and make an RN through the NLWT system available on myAccount.

Next: Local authorities and housing authorities