How Rental Income is Taxed in Ireland

Rental income is taxed as income — not at a flat rate

Unlike CGT, which is a flat 33% regardless of your other income, rental profit is added on top of everything else you earn. That means the tax rate depends on where your total income lands.

For most people who also have a salary, their rental income pushes them above the standard rate band (€42,000 for a single person) and is taxed at the higher 40% rate. If you're already earning €50,000 from employment, every euro of rental profit is taxed at 40% before USC and PRSI are even added.

The three taxes on rental income

As a landlord, you pay three separate charges on your rental profit:

• Income Tax (PAYE): 20% if your total income is within the standard rate band, 40% above it.
• USC (Universal Social Charge): Charged in bands on your total income. For most landlords with a salary, rental income is subject to the higher USC bands (3% or 8%).
• PRSI: Rental income is subject to 4% PRSI under Class S (self-employed). Unlike employees, there is no employer contribution — you pay all of it yourself.

Add those up for a higher-rate taxpayer and the effective tax rate on rental profit can reach 50% or more.

What rate will I actually pay?

Here's a simple example. You earn €55,000 from employment and €15,000 per year from rent (€1,250/month). All €15,000 of rental profit is above the €42,000 standard rate band, so:

The exact figure depends on your salary, expenses, and whether you're PRTB-registered. That's exactly what the calculator works out.

Allowable deductions — what you can subtract

The good news is that you're taxed on rental profit, not rental income. Allowable expenses reduce the taxable amount:

• Mortgage interest — 100% deductible if you're PRTB-registered (up from 80% under Budget 2024 changes)
• Repairs and maintenance — painting, fixing the boiler, replacing broken appliances. Not improvements like a new kitchen.
• Insurance premiums — landlord insurance, contents insurance
• Letting agent / management fees
• PRTB registration fee
• Accountancy fees

Wear and tear on furnishings can also be claimed — 12.5% per year over 8 years on qualifying furniture and equipment.

The PRTB requirement — why it matters

The Residential Tenancies Board (RTB, formerly the PRTB) is the body that registers private tenancies in Ireland. Registering costs around €90 per tenancy and takes about 15 minutes online.

If you don't register, you lose the right to deduct mortgage interest from your rental income entirely. For a landlord with €8,000/year in mortgage interest paying 40% tax, that's €3,200 more tax per year — for failing to fill in one form.

What you can't deduct

A few things landlords sometimes try to claim that Revenue won't allow: capital improvements (building an extension, fitting a new kitchen — these may qualify for wear and tear instead), mortgage capital repayments (only the interest portion counts), your own time spent managing the property, and personal expenses that overlap with the property.

Pre-letting expenses

If you spent money preparing a property to let in the 12 months before the first tenant moved in, you can claim those expenses — up to €5,000. This covers things like painting, cleaning, or minor repairs done before listing.

It's a useful relief for landlords who've recently purchased or refurbished a property before renting it out.

How to declare and pay

Rental income must be declared every year, even if PAYE is your main income source. If your rental income is under €5,000 and you have no other non-PAYE income, you may be able to use Form 12 via myAccount. Most landlords will need to file a Form 11 (self-assessed).

Preliminary tax (an estimate of this year's liability) is due by 31 October each year. The full return is also due by 31 October (or mid-November via ROS). Missing the deadline triggers a surcharge of 5–10% on top of the tax owed.