Rental income tax relief

There has long been a keen interest in property from Irish people. Many Irish people own property outside their principal home, and act as landlords, whether by accident or design. Any rental income received is liable to taxation under Section D, and is subject to Income Tax, PRSI, and USC as applicable.

A temporary rental income tax relief has been introduced with effect from January 2024. This relief will be at the standard rate of 20% and will be available against a portion of the rental income received. This relief will be available from 2024 until 2027, with the stated aim of removing the relief from 2027 onwards. The 20% relief is calculated as follows:

2024 – 20% of €3,000 (€600)

2025 – 20% of €4,000 (€800)

2026 – 20% of €5,000 (€1,000)

2027 – 20% of €5,000 (€1,000)

This will effectively reduce the tax due on rental income by €600 in 2024, €800 in 2025, and €1,000 in 2026 and 2027.

It should be noted that these reliefs will only apply if the landlord keeps their rental property in the rental market for the four years (2024 – 2027). In the event that the landlord leaves the rental market during this period, the relief will be clawed back.

Given the recent increases in mortgage repayments due to hikes in interest rates, this will be welcomed by landlords across the board.

If you would like to discuss this further, and how it intersects with your overall Financial Planning, please contact me at rossdevlin@biograph.ie and I would be delighted to assist you.