← Guides / Ireland

Ireland Rental Income Guide

rental income tax in Ireland — rental profit taxed at marginal IIT rates, wear and tear allowance 12.5% per year, interest deduction restricted to 80%, and RTB registration requirements.

Rental income in Ireland is taxed as part of the landlord's total income at marginal Income Tax rates (20% and 40%), plus USC and PRSI. The profitability of a rental property investment depends heavily on understanding the available deductions, the interest restriction rules, and the regulatory requirements including registration with the Residential Tenancies Board (RTB). See also our guides on Tax Filing, Cross-Border Tax, and Pension & Retirement.

Rental Profit — Taxed at Marginal Income Tax Rates

Net rental income (rent received less allowable expenses) is added to the landlord's other income and taxed at their marginal Income Tax rates — 20% standard rate and 40% higher rate. In addition to Income Tax, rental profits are subject to the Universal Social Charge (USC) at rates from 0.5% to 8%, and PRSI at 4% (for self-employed landlords) or 4% on all income (Class S for landlords who are not PAYE employees). The combined marginal rate on rental income can reach approximately 48% for higher-rate taxpayers (40% Income Tax + 8% USC + 4% PRSI on self-employed income).

Rental income is assessed on a current-year basis — the income earned in a tax year is declared in the tax return for that year and tax is payable by the preliminary tax deadline (31 October or 14 November for ROS filers). Losses from rental activities can be carried forward to offset against future rental income from the same property or other properties, but cannot be offset against earned income or investment income. Careful management of rental income and expenses is essential to avoid unexpected tax liabilities.

Wear and Tear Allowance — 12.5% Per Year

Landlords can claim a wear and tear allowance (capital allowances) on the cost of furniture, fixtures, and fittings provided in a rented residential property. The allowance is calculated at 12.5% of the cost per year over 8 years. Eligible items include carpets, curtains, beds, sofas, tables, chairs, white goods (fridges, washing machines, cookers), and other removable fixtures. The items must be used for the purposes of the rental business and must be provided for the use of the tenant.

The wear and tear allowance applies only to items with a useful life of 8 years or more. Items costing less than €2,000 can be claimed in full in the year of purchase (under the "low value asset" rules) rather than being spread over 8 years. Landlords should maintain detailed records of all furniture and fixture purchases, including receipts, descriptions, and the date of purchase and installation. The allowance is claimed as a deductible expense in the rental income computation and reduces the net rental profit subject to tax.

Interest Deduction — Restricted to 80%

Since 2009, the deductibility of interest on borrowings used to purchase, improve, or repair rental property has been restricted. For 2026, interest is deductible at 80% of the amount paid. This restriction is being phased out gradually — from 2025 onwards, the full 100% of interest is deductible. The restriction applies to interest on loans used to acquire or develop residential rental properties, and to loans used to purchase a rental property.

To qualify for the deduction, the loan must be used for the purpose of the rental business. Interest on loans used for personal purposes, or loans secured against the rental property but used for personal purposes, is not deductible. The interest must be paid in the tax year (accrued but unpaid interest is not deductible). Revenue may query the quantum of interest claimed if the loan significantly exceeds the market value of the property or if the interest rate appears excessive — landlords should ensure that borrowings are on arm's length terms and that interest is properly documented. From 2025, the full 100% deduction applies, making rental property investment more attractive from a tax perspective.

Allowable Expenses

Landlords can deduct a wide range of expenses incurred wholly and exclusively for the purpose of the rental business. These include: repair and maintenance costs (but not initial improvements or capital expenditure), letting agent fees and management charges, insurance premiums (building insurance, landlord liability insurance), property tax (Local Property Tax), utilities paid on behalf of tenants, professional fees (accountants, solicitors, surveyors for tenancy matters), advertising costs for finding tenants, legal costs for evictions or lease renewals, and travel expenses for inspecting the property (restricted to Revenue-approved rates).

Expenditure that is capital in nature — such as extending the property, adding a new roof, or installing central heating — is not deductible as a revenue expense but may qualify for capital allowances or be added to the property's cost base for CGT purposes on eventual sale. The distinction between repair (deductible) and improvement (capital) is often a matter of fact and degree. Revenue's guidance provides examples: replacing a broken window is a repair (deductible), while replacing all windows with double-glazed units is an improvement (capital). Landlords should keep detailed invoices and documentation to support all expenses claimed.

RTB Registration Requirements

Residential landlords in Ireland must register all tenancies with the Residential Tenancies Board (RTB). Registration is mandatory for all private residential tenancies, including those let by approved housing bodies and student accommodation (subject to certain exemptions). The registration fee is €90 per tenancy (for tenancies registered within the first month) to €180 per tenancy (for late registration). The tenancy must be registered within 1 month of the tenancy commencement date.

RTB registration must be renewed annually — the renewal fee ranges from €90 (online renewal) to €180 (paper renewal) per tenancy. The RTB maintains a public register of tenancies (redacted for privacy) and can impose penalties of up to €4,000 for failure to register. Registration is also a prerequisite for claiming certain tax reliefs and for the landlord's ability to use the RTB dispute resolution service for disputes with tenants. Since 2022, the RTB also requires landlords to provide information on the rent amount and rent pressure zone (RPZ) status at registration. The RTB's website provides an online portal for registration and renewal, and landlords should ensure their registration is current to avoid penalties and maintain compliance.

Rent Pressure Zones (RPZs) and Rent Controls

Many areas of Ireland are designated as Rent Pressure Zones (RPZs), where rent increases are capped at 2% per year (or the rate of general inflation as measured by the Harmonised Index of Consumer Prices, whichever is lower). RPZs cover most urban areas including Dublin, Cork, Galway, Limerick, Waterford, and many other towns and cities across Ireland. In RPZs, landlords cannot set a rent higher than the market rent (subject to the 2% cap) and cannot increase rent more than once every 12 months (or 24 months for tenancies created before 24 December 2016).

Outside RPZs, rent increases are not capped by legislation but must be set at market rate and cannot be increased more than once every 12 months. Landlords must provide 90 days' written notice of any rent increase. Since 2021, new tenancies in RPZs are also subject to the 2% rent increase cap, meaning a landlord cannot set an initial rent above market rate to circumvent the cap. The RTB can investigate suspected breaches of RPZ rules and may require landlords to refund excess rent collected. Non-compliance with RPZ rules is a serious matter and can result in adverse findings by the RTB with financial consequences for the landlord.