You collect €1,600 a month from a tenant in Castletroy, and by the time the mortgage, the insurance and the plumber are paid, a good chunk of it is gone. So what exactly does Revenue tax? Not the rent. The profit.
That single distinction is where most first-time landlords go wrong, and it is usually the difference between a nasty surprise in November and a bill you saw coming. This guide covers standard long-term residential lettings: how rental profit is worked out, which costs you can deduct, how mortgage interest and pre-letting expenses are treated, the Residential Premises Rental Income Relief, Universal Social Charge (USC) and Pay Related Social Insurance (PRSI), and where it all goes on your Form 11. Short-term and holiday accommodation, rent-a-room relief and non-resident landlord rules work differently, so treat those as separate topics.
What tax do I pay on rental income in Ireland?
Irish rental profit is taxed as Case V income under Schedule D. It gets added to your other taxable income for the year and taxed at your marginal rate. There is no general tax-free allowance for ordinary rental income, so even a small profit on one property is taxable from the first euro.
For 2026, a single person has a standard rate band of €44,000 taxed at 20%, with the balance at 40%, according to Revenue’s tax rates and bands chart. Your salary is taxed first in practice, so if you already earn €50,000, your rental profit sits on top and is taxed at 40%. If your total income stays under the band, some or all of the profit is taxed at 20%. Unused personal tax credits can reduce the final bill, though most PAYE workers have already used theirs against salary.
Then there are the two extras that catch people out. USC applies to rental profit at the standard 2026 thresholds: 0.5% on the first €12,012, 2% on the next €16,688, 3% on the next €41,344 and 8% on the balance. PRSI applies too. The Class S rate is 4.2% until 30 September 2026 and 4.35% from 1 October 2026, which gives a blended rate of 4.2375% for a full 2026 tax year, with a minimum annual charge of €650 for self-employed contributors. An employee whose only non-PAYE income is rent is charged under Class K instead.
One thing worth pinning down now: the Residential Premises Rental Income Relief reduces income tax only. It does nothing to the profit charged to USC or PRSI.
How do I calculate my taxable rental profit?
The core sum is short:
- Gross rental income
- Less allowable revenue expenses
- Less qualifying mortgage interest
- Less capital allowances
- Equals taxable rental profit
Jointly owned property is split by ownership share. If you and your spouse own a house 50:50, each of you returns half the income and half the expenses on your own figures.
Gross rental income means the rent plus anything the tenant pays you for services or bills you are responsible for. A refundable security deposit is not income when you receive it. If you later retain part of it for unpaid rent or damage, that retained amount usually becomes taxable in the year you keep it.
Revenue’s list of allowable expenses covers the running costs of the letting: letting agent and management fees, RTB registration (€40 a year per tenancy when registered on time), insurance against fire and public liability, mortgage protection premiums, repairs and maintenance, advertising for tenants, accountancy fees for preparing the rental accounts, qualifying legal fees, local authority rates and ground rents, and any electricity, heating, water or refuse charges you pay rather than the tenant. Landlords may also need to hire professional tradespeople for ongoing property maintenance, such as plumbers, electricians or professional painters.
Repairs and improvements are not the same thing. Fixing a rotten window frame is a repair and comes off this year’s profit. Replacing every window with a new double-glazed system is capital expenditure and does not. Furniture, white goods and equipment get wear and tear capital allowances instead: 12.5% of the cost each year for eight years, so a €4,000 kit-out gives you €500 a year, not €4,000 in year one.
Revenue is equally clear on what you cannot claim:
- The capital portion of your mortgage repayments
- The value of your own labour on repairs (a Saturday spent painting is not a deduction)
- Local Property Tax
- Capital improvements, unless covered by a specific incentive scheme
- Costs of buying the property, such as stamp duty and purchase legal fees
- Income tax itself, and any private or personal element of a cost
Can I claim mortgage interest and expenses from before the property was let?
Yes to mortgage interest, with conditions. The loan must have been used to buy, improve or repair the rental property, and only the interest element is deductible. Revenue also requires that the tenancy be registered with the Residential Tenancies Board where registration is required. Interest is allowable while the property is let and during periods between lettings, provided you do not occupy it yourself. Interest running from purchase up to the first letting is not deductible. If a loan is part rental and part private, apportion the interest on a reasonable basis and keep the workings.
Pre-letting expenses are the other half of the question. Normally you cannot deduct costs incurred before the first tenant moves in, but there is a targeted relief for previously vacant residential property. Under Revenue’s guidance on pre-letting expenditure:
| Condition | What applies |
|---|---|
| Vacancy period | Premises vacant for at least 6 months before the letting |
| Look-back period | Costs incurred in the 12 months before it is first let |
| Cap | €10,000 per vacant premises |
| Type of cost | Must be of a kind normally deductible during a tenancy |
| Clawback | Withdrawn from the rental market within 4 years |
| Scheme end date | Available to the end of 2027 |
Because the cap and the vacancy period have both changed since the relief was introduced, check the current position for the exact tax year you are filing before you claim.
How does the Residential Premises Rental Income Relief reduce my tax?
The Residential Premises Rental Income Relief (RPRIR) is a temporary relief for individual landlords, available for 2024 through 2027. It is not an expense. You calculate your rental profit first, work out the income tax, then take the relief off the tax.
The amount is the lower of 20% of your Case V rental income or the annual cap:
| Tax year | Maximum relief | Rental profit needed to reach the cap |
|---|---|---|
| 2024 | €600 | €3,000 |
| 2025 | €800 | €4,000 |
| 2026 | €1,000 | €5,000 |
| 2027 | €1,000 | €5,000 |
The qualifying conditions are tested at 31 December: you must own a qualifying residential premises, hold tax clearance, be LPT compliant, and the property must be let under an RTB-registered tenancy, let to a local authority, or actively marketed for rent. Letting to a connected person such as a family member rules the relief out.
Two limits matter. The relief cannot create a refund, and it does not touch USC or PRSI. There is also a clawback if you sell, gift or withdraw the property from the rental market within 4 years of the first year you claim.
A quick illustration. Rental profit of €3,500 in 2026: 20% is €700, which is under the €1,000 cap, so the relief is €700. If the income tax on that profit came to €1,400, you deduct €700 and pay €700 in income tax, plus USC and PRSI on the full €3,500.
How much tax could be due on one rental property in Limerick?
Here is a full worked example. Tax year 2026. Single landlord, PAYE salary of €55,000, one long-term residential letting in Limerick city at €1,600 a month, tenancy registered with the RTB. The salary already uses the €44,000 standard rate band, so every euro of rental profit is taxed at 40%.
| Line | Amount |
|---|---|
| Gross rent (€1,600 x 12) | €19,200 |
| Letting and management fees | (€1,850) |
| Insurance | (€520) |
| Repairs and maintenance | (€1,100) |
| RTB registration | (€40) |
| Accountancy fees | (€350) |
| Qualifying mortgage interest | (€4,800) |
| Capital allowances (12.5% of €4,000) | (€500) |
| Taxable rental profit | €10,040 |
| Income tax at 40% | €4,016 |
| Less RPRIR (lower of €1,000 or 20% of €10,040) | (€1,000) |
| Income tax payable | €3,016 |
| USC at 3% (profit sits in the 3% band) | €301 |
| PRSI at 4.2375% | €425 |
| Total tax | €3,742 |
| After-tax rental profit | €6,298 |
That is an effective rate of about 37% on the profit. Another landlord with identical rent can land somewhere completely different, because the answer depends on the rest of their income, their USC band, their PRSI class and how much interest they are paying.
Two variations on the same property:
| Scenario | Taxable profit | Total tax | Effective rate |
|---|---|---|---|
| Standard rate taxpayer (20% income tax, USC at 2%) | €10,040 | €1,634 | 16% |
| Higher rate, no mortgage interest to claim | €14,840 | €6,010 | 41% |
The mortgage-free landlord keeps €8,830 after tax against €6,298, but pays €2,268 more tax on the same rent roll. Interest relief is doing real work here.
Where do I put rental income and expenses on my Form 11?
Most landlords file a Form 11 through the Revenue Online Service (ROS). You become a chargeable person, and must self-assess, if your net non-PAYE income is €5,000 or more, or your gross non-PAYE income reaches €30,000. Below those thresholds a PAYE worker can generally declare the rent through a Form 12 in myAccount instead.
Inside the Irish rental income section you enter, per property:
- Gross rent receivable for the year
- Deductible expenses split by category, with repairs kept separate from capital spend
- Qualifying mortgage interest, entered in its own field rather than lumped in with expenses
- Capital allowances on furniture, appliances and equipment
- Rental losses forward from earlier years
- The resulting profit or loss
Claim the RPRIR in its own section of the return, not as a rental expense. If you enter it as an expense you understate the profit and overstate the relief at the same time, and the figures will not agree with your rental accounts.
Enter your ownership share where the property is jointly held, and keep a separate computation for each property before the totals are combined. Preliminary tax for the current year is due alongside the balancing payment for the prior year, so budget for both. ROS field names get tweaked from year to year, so read the current Revenue filing guidance before you submit, or hand the return preparation to someone who does it weekly.
Frequently asked questions
Can rental losses be offset or carried forward to future years?
Yes. A Case V loss can be carried forward indefinitely and set against future Irish rental profits, per Revenue’s guidance on rental profit and losses. It can only be used against Irish rental income, not against salary or trading income, and you cannot use your spouse’s rental losses against your own profits. Capital allowances are used first, before brought-forward losses.
What records and receipts must a landlord keep for Revenue?
Keep everything that supports the figures on your return for six years: the lease or tenancy agreement, rent records and bank statements showing lodgements, invoices and receipts for every expense claimed, the RTB registration confirmation, mortgage interest certificates from your lender, and purchase invoices for furniture and appliances on which you claim capital allowances. Revenue can look for them, and “I think it was about €400” is not a deduction. Good record keeping through the year makes the October filing a twenty-minute job.
When must rental income be declared and the tax paid?
Rental income is declared on the return for the year in which it arises. The 2025 Form 11 was due by 31 October 2026, with the ROS extended deadline of Wednesday 18 November 2026 for those who both file and pay online. The same date carries the preliminary tax payment for 2026. Miss it and surcharges plus interest apply, so the deadline is worth a calendar entry.
What should I do before filing my rental income return?
Before you open ROS, get the underlying numbers straight:
- Reconcile rent received against your bank statements, month by month, including any part-months or arrears
- Categorise every expense and pull the receipt for each one
- Split repairs from capital improvements, and list anything that should go into capital allowances instead
- Confirm the tenancy is RTB registered and that your LPT is up to date, since both feed into interest relief and the RPRIR
- Check the rates, relief caps and deadline for the specific tax year you are filing, because they move
If your situation has any of the usual complications, a mixed-purpose loan, pre-letting costs on a property that was vacant, several owners on the deeds, losses carried forward, or genuine doubt about which Form 11 field a figure belongs in, get it checked. Coffey & Co work with landlords across Limerick and Munster, and a short conversation about tax advice before you file usually costs less than the interest on a bill you got wrong. Get in touch and we will tell you plainly what your position looks like.
The information in this blog is provided for general informational purposes only and does not constitute accounting, tax, business, or legal advice. While Coffey & Co aims to ensure the content is accurate and up to date, no guarantee is given regarding its completeness or suitability for any particular purpose.