Questions and Answers
Can I claim for pre-letting expenses?
I am about to let out a property that has been vacant, what do I need to know about pre-letting expenses?
In general expenses that you incur prior to letting a property are not allowable against the profits you make from renting the property, apart from advertising costs and estate agent fees. However, in a lot of cases, before a property is let out the landlord will need to have some work done, like painting or repairs.
In late 2017, the Government introduced a new relief in respect of vacant properties. This relief allowed landlords to claim a tax deduction for pre-letting expenses up to a value of €5,000, where a property had been vacant for at least 12 months.
In Budget 2023, it was announced that from 01 January 2023 landlords can now claim a tax deduction up to €10,000 for such expenses.
The 12-month vacancy period has also been reduced, so now if a property has been unoccupied for a 6-month period you can claim certain pre-letting expenses.
It is important to note however that if the property falls vacant again, or is no longer used for residential rents within 4 years of claiming this expense, it will need to be repaid.
This relief was extended in Budget 2024 for a further three years, up to 31 December 2027.
Are you a landlord looking for help with your tax return? Contact TaxAssist Accountants for a free, no-obligation consultation.
Frequently Asked Questions
Landlords need to register each of their tenancies with the Residential Tenancies Board (RTB) every year. This must be completed within one month of the anniversary when the tenancy began.
Yes, if you rent out a property you need to file a Tax Return each year and you will pay income tax on the difference between the rents you have charged in a tax year, less any allowable expenses and charges.
Yes, if you make money from renting with Airbnb you need to file a Tax Return. Also, where an Airbnb host generates income of €40,000 per annum they must register for and charge VAT at the appropriate rate and file the appropriate VAT Returns.
If you are an Irish resident, any rental income earned on an overseas property will also be subject to the Irish tax regime. You will be able to claim deductions to reduce your rental profit in the same manner as you would for your Irish property.
No, Local Property Tax (LPT) cannot be claimed as a deduction from your rental profit.
You need to make a Tax Return on your investment property regardless of whether it is profit or loss making. However, you should know that if you make a loss in one year this loss can be carried forward to reduce any future rental profits hence lowering your tax bill.
You may be able to reduce your taxable profit by claiming rental expenses incurred such as mortgage interest, repairs and maintenance, insurance and accountancy fees.
Capital allowances are an annual allowance for expenses incurred on capital items. An example of a capital item would be if you purchase a new boiler. Because this is considered a capital item for the property, the cost of this will be allowed over eight years.
From 2018 a new deduction of up to €5,000 per property for pre-letting expenses of a revenue nature are allowable subject to the property being vacant for a period of 12 months or more.
If you sell a property which is not your principal private residence you will be liable to capital gains tax (CGT) on any gain you make on the sale.
As part of Budget 2024 the Minister introduced a new landlord tax relief for the years 2024 to 2027. For these years, tax relief at the standard rate of tax will apply to a certain amount of rental income. Find out more
NLWT stands for Non-Resident Landlord Withholding Tax. The new NLWT system enables tenants or collection agents to make Rental Notifications (RN) when making payments to a non-resident landlord.
Date published 29 Sep 2022 | Last updated 30 Oct 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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