Last Updated on October 8, 2024 by Kristina Valcheva
Key information for non-resident landlords.
In this article you will learn:
- Is now a good time to buy property in Ireland?
- Important information about Irish rental income tax
- What you need to know about tax if you are earning rental income from a property in Ireland
- Who can help you get your Irish property taxes in order?
Planning on buying property in Ireland?
Real estate remains the king of investments. It’s not a coincidence that we have been told that a house is the best way to invest your money.
However, regardless of how great this market is, it still goes through ups and downs. Prices of Irish properties continue to grow rather than fall, as some predicted at the start of the pandemic.
Despite COVID, demand hasn’t dipped. It remains high and this trend is expected to continue for the foreseeable future.
Long story short, it is not difficult to find tenants for a rental property in Ireland.
That being said, is now a good time to buy a rental property in Ireland? What are your tax obligations when you sell, buy, or rent your real estate? Let’s dig deeper to find out.
Is it a good time to buy property in Ireland?
Many influential economists have predicted that house prices will continue to rise, especially in Dublin. Some even predict that growth will continue until at least 2024.
Prices in Dublin have risen by 10.2% in the last year, while prices outside the capital have risen by 11.5%.
The average price paid for a home in the State is around €20,271 more than it was a year ago, while average prices in Dublin are about €43,682 higher.
The mid-east was the most expensive region outside of Dublin, with a price of €330,813. Wicklow had the highest average price – €417,768.
The key advantage of Irish rental property is that it offers investors a dependable source of income.
That said, investors must remember that there are some restrictions on the amount of income that can be earned each year.
Rent pressure zones are in place in areas where demand is particularly high. Here rents can not be raised by more than 4% per year.
As previously noted, Ireland has a housing shortage, and the number of available houses for rental has dipped dramatically since the coronavirus outbreak.
This pushed rents upwards, and the average monthly rent in Ireland at the beginning of 2021 was approximately €1,414 This is 0.9% higher than the year before.
Between January and March 2023, the average cost of property advertised in Ireland was €308,497. This amount is 2.7% more than what it was during the same time in 2022.
That being said, you will need to make sure that your buy-to-lets rent will cover your total expenses.
It’s also essential to have some money set aside in case your rent starts to vary, or your property becomes unoccupied unexpectedly.
Buying a rental property in Ireland now could be a great investment – but only if you’ve carefully considered all of the current benefits and drawbacks, as well as whether it’s a good fit for your financial situation.
Is Ireland a good place to invest in property?
Ireland is a developed country with one of the world’s highest per capita incomes.
The country has been a hub for expats, foreign students, and IT workers in recent years as a result of the government’s efforts to promote the growing high-tech sector, commerce, and investment.
The Irish housing market is drawing both foreign and domestic investors, thanks to one of Europe’s fastest-growing populations.
Can foreigners buy property in Ireland?
Yes, of course, but you will need first to apply for an Irish PPS number, so you can eventually buy a property in Ireland.
Purchasing a home does not grant you the right to live there as well.
Non-EU citizens and citizens of the United States who wish to stay in Ireland for more than 90 days must apply for a visa or apply for Irish citizenship.
I am a non-resident landlord. What do I need to know about Irish tax?
If you own a rental property in Ireland but do not live there, you are considered a non-resident landlord.
As one, you must register any rental real estate in Ireland with the Revenue Commissioners.
You should also select a Collection Agent or work out a deal with tenants to transfer a percentage of the monthly rental fee to the Revenue Commissioners.
Property owners must, of course, file rental income tax returns in Ireland for any income received, and pay any rent income tax they owe.
It’s essential to remember that your taxes must be paid and filed by 31 October of each year.
When it comes to collecting rent and paying tax on rental income, non-resident landlords have two alternatives.
- They can hire a “collection agent” to handle their tax filing in Ireland, or
- The tenants can withhold 20% of their rent as rental income tax and pay it straight to the Revenue Commissioners on your behalf
When you file property tax return, you will be able to claim this as a credit.
Managing, filing, and paying your taxes while living overseas may be both time-consuming and frustrating.
The property tax experts at Property Tax International are ready to assist you in filing rental income tax return in Ireland online.
What is a rent collection agent?
An agreement with your tenant may seem to be the easier option but your renters may not want to bear the burden of paying taxes on your behalf.
Choosing a Collection Agent is most effective for landlords who have many properties, or who have little or no contact with their tenants.
A Collection Agent is an Irish resident you choose to be responsible for receiving the rent, reporting, and paying your rental income tax each year. It can be a personal contact you trust, such as a family member or friend, or a professional service provider.
Nominating a Collection Agent in these situations can also save you money in the long run, as well as missed, erroneous, or late tax payments can result in severe fines.
You may have peace of mind knowing that your tax responsibilities are being paid on time and that you are fully compliant with the Revenue Commissioner in Ireland by nominating Property Tax International (PTI Returns) as your Irish Rent Collection Agent.
See our Irish rent collection service
Selling or buying property in Ireland and taxes
If you’re thinking about buying or selling real estate in Ireland, you’ll need to understand the taxes you’ll have to pay. Make sure you get a grasp of all the rules so you don’t break the law.
Both the seller and the buyer have obligations when selling, buying, or transferring property in Ireland.
What taxes do I need to pay if I sell property in Ireland?
If you are the seller, you are obliged to file any outstanding Local Property Tax (LPT) return before finalizing the sale and to pay any outstanding tax (plus interest and penalties).
In case you have applied for an exemption from LPT, your property will be listed as exempt on your record. There are no immediate implications on selling exempt properties with one exception in respect of properties that were purchased from ‘first-time buyers’ who bought the property in 2013.
If you own the property on 1 November, you will be liable for paying the LPT. Based on this, if you sell your property between November 1 and December 31, 2023, you will be responsible for paying LPT for the year 2023.
Withholding tax
If the value of an Irish property that is for sale exceeds €500,000 (for commercial property) or €1,000,000 (for residential property), the purchaser is required to withhold 15% of the sale consideration, unless the seller applies for a CG50A clearance certificate. You can get the CG50A clearance certificate from Revenue if you are a resident or if you have paid CGT on the disposal if required.
Where the purchaser withheld the 15% of the consideration and has paid the amount to Revenue, they will provide you with a CG50B certificate which gives you the possibility to apply for the amount withheld.
VAT/ transfer tax
VAT on the sale of the property can be due in case of a supply of property in the course of a business unless the property is VAT-exempt.
Generally, the sale of old properties is exempt from VAT.
Capital Gains Tax in Ireland (CGT)
Capital Gain Tax – CGT is a tax in Ireland on any profit (capital gain) you make when you sell an asset and the individual who sells the asset is obliged to pay it.
The difference between the price you bought the asset and the value you sold it for is usually the chargeable gain on which CGT is due.
– sold an asset
– exchanged it
– gifted it
– got insurance or compensation for it
The date you sold, gifted, or transferred an asset determines when you pay and file a CGT tax return.
Keep in mind that interest will be charged if you pay late. There will also be a penalty if your return is late.
On gains made on the sale of Irish real estate, individuals are subject to Capital Gains Tax (CGT) at a rate of 33%. Depending on the relevant circumstances, a variety of CGT reliefs and exemptions may be available.
If you sold the property between:
– On 1 January and 30 November, you should pay CGT by 15 December of the same year.
– On 1 December and 31 December, you should pay CGT by 31 January of the next year.
You must file by October 31 of the year following the date of the sale. Even if no tax is payable due to reliefs or permitted losses, you must do so.
Got questions? Request a free callback from a tax expert.
What do you need to know about tax if you are earning rental income from a property in Ireland?
If you receive income from renting out real estate, or from another source that qualifies as rental income in Ireland, it is taxable.
Depending on your specific circumstances (marriage status, how much you’re charging tenants, whether you have other sources of income, etc. ), you’ll pay either 20% or 40% income tax on your net rental income.
You may be subject to USC if your rental income is more than €13,000 annually and subject to PRSI if you are deemed a chargeable person and tax resident in Ireland. Non-resident landlords are exempt from PRSI.
Rental income includes:
- the renting out of an apartment, house, flat, farmland, or office
- or payments you receive for:
- permitting the placement of advertising signs or communication transmitters on your property
- granting access to your property through a right-of-way
- granting sporting rights on your property, such as shooting or fishing
- the price of repairs to your rental home. The lease should not oblige your tenant to pay for this work
⚠️ also:
- deemed and reverse premiums, as well as certain lease premiums
- conacre lettings (conacre is a system of agricultural land letting that is unique in Ireland)
- service fees for services related to the property’s occupation
- payouts from insurance policies that protect you from the non-payment of rent
How much rent can I earn before I pay tax in Ireland?
This depends on whether you are:
- renting out the entire real estate
- renting out a room in your house for an extended period (long-term basis)
- renting out a room in your house for a brief period (short-term guest accommodation)
- Renting out the entire real estate
If you expect rental gains of more than €5,000 per year, Revenue will classify you as a ‘chargeable person’.
In this case, you will be required to register for income tax (by filling out a TR1 form or online via ROS) from the date the property was first rented. After that, before 31 October following the year during which the property income was received, you must file a Form 11 tax return.
You will not be regarded as a ‘chargeable person’ if your profits are less than €5,000 per year, and you will not be obliged to register for income tax.
Nonetheless, you will be required to pay tax on rental income in Ireland. You must, however, file Form 12 instead of Form 11 every year.
The amount of tax due (if any) on your rental income depends on the number of tax credits and reliefs you can use for the tax year. - Renting out a room in your house for an extended period (long-term basis)
You may be eligible for rent-a-room relief if you rent out a room in your house for a long time and earn no more than €14,000 in a tax year (must be living in the house). In this case, you will not be subject to income tax, USC, and PRSI.
Your total income will be taxed if you earn more than the exemption limit of €14,000. You will also be regarded as a chargeable person. A chargeable person should register for income tax and file rental income tax returns Form 11. - Renting out a room in your house for a brief period (short-term basis)
You will not be eligible for rent-a-room relief if you rent a room – or your entire property – temporarily (for example, via Airbnb).
In general, the provision of short-term accommodation will not create a landlord/tenant arrangement and is so classified as trading income instead of rental income.
The general rule for deductible expenses is that the expense incurred is wholly and exclusively for the trade.
Again, If your rental income exceeds €5,000 per year, you must register for income tax and file a Form 11 tax report each year. You should complete Form 12 each year if your rental income is less than €5,000 per year.
What is the deadline for filing my Irish property tax return?
The deadline for filing your Irish rental income tax return and paying tax is 31 October following the year of assessment. This extends to mid-November if you pay and file rental income tax return online. For example, a tax return for 2021 is due on or before 31 October 2022.
How can I claim rental expenses in Ireland?
Rental expenses must be reported on your tax return (Form 11 or Form 12 depending on your circumstances).
You should keep track of all documentation (invoices, receipts, and so on) related to the rental expenses you’re claiming.
What rental expenses can I claim in Ireland?
Did you know that you can deduct a variety of expenses from your rental income to lower your overall tax liability?
See some of the examples in the dedicated section of our article regarding “Rental property owner’s tax guide & self-assessment for Ireland.” Also learn which expenses you are unable to deduct as a rental expense in Ireland.
If you would like to know more about the Rent-a-Room tax relief and taxes if you have a rental property in Ireland, you can also refer to our ultimate Irish property tax guide.
What documents do I need to sell my house in Ireland?
Title documents
Getting in touch with your solicitor before the sales process is the most significant step in selling your house. You must request the title documents for the property you wish to sell from your lawyer.
If you still owe money for the house, and you have a mortgage, the title documents will be retained by your bank. As soon as you have the chance, request these title documents.
BER Certificate (Building Energy Rating)
Before selling your property, you must provide a BER as the owner. Details about the BER must be given in commercial advertisements for the sale. A BER is also required before a new home can be occupied.
There are several exceptions for particular kinds of buildings. Protected structures and certain temporary structures, for instance. That being said, you should arrange for an engineer to perform a BER on your property.
Selling a family home in Ireland
If you’re selling your family home, you’ll need the approval of the other spouse, even if it’s in only one of the spouse’s names.
The Family Home Protection Act of 1976 demands this. If both names appear on the deeds, the problem is solved because both signatures are necessary anyway.
After the sale of the family home is completed, both spouses will be required to sign a Family Home Protection Act Declaration. A copy of your state marriage certificate will also be needed.
Do you need a solicitor to sell property in Ireland?
Yes. To sell a house, you need to hire a solicitor or a conveyancer. The legal part of this endeavor is handled by a solicitor, not a real estate agent.
Some people believe that just because they have an estate agent, they don’t need a solicitor. You should not do this since certain duties are only performed by a lawyer.
A solicitor, for example, is the only person permitted by law to provide legal advice to sellers like you.
Who can help me get my Irish property taxes in order?
Do you have a rental property in Ireland but the prospect of dealing with tax documentation makes you feel anxious and overwhelmed?
Did you know that besides your tax obligations, you are also able to claim a tax refund? And if you claim all of the applicable expenses for your circumstances you could boost the tax rebate?
Do you sell/buy an Irish property and Capital Gains sounds like something you don’t want to deal with yourself?
Are you looking for a property tax specialist? We are here!
PTI Returns’ tax advisors can assist you in filing your rental income tax return online and claim your refund, no matter if you are an Irish resident or non-resident.
Why choose PTI Returns?
Save time and stress – Our property tax specialists will handle all the tricky tax paperwork
Peace of mind – Property Tax International (PTI Returns) is part of Clunetech (formerly known as Taxback Group), employing over 1,500 people in more than 20 countries worldwide. We have more than 25 years of experience in international tax and we will keep you compliant with the Revenue
Convenient service – Our service is online and we will transfer your tax refund straight to your bank account anywhere in the world
Your questions answered – If you have any questions that we did not answer, you can request a free callback from our tax advisors
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