I am about to let out a property that has been vacant, what do I need to know about pre-letting expenses?

A. Prior to 2018 expenses incurred prior to the first tenant moving in were not allowed as a deduction in reducing your tax bill except for a small number of limited exceptions e.g. fees for advertising the property.

From 1 January 2018 however, you can deduct expenses incurred before the tenancy starts once the following criteria are met:

• the property was vacant for at least 12 consecutive months before it is let
• the expenditure would have qualified as a rental deduction for tax purposes if the property had been let when the expenditure was incurred
• the amount of the deduction is capped at €5,000 per vacant property

If the property ceases to be let as a residential property within four years of its first letting, any relief claimed will be clawed back. 

Budget 2024: /resources/budget-reports/budget-2024

Date published 11 May 2018 | Last updated 29 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.