If you are an Irish non-resident landlord, you should be aware of recent changes to the laws governing rental income in Ireland. Find out about Ireland’s new Non-Resident Landlord Withholding Tax (NLWT), temporary tax relief for landlords, and vacant home tax. It’s essential you understand your tax liabilities and obligations and ensure you are compliant.
Changes to Irish laws on rental income for non-resident landlords
If you are resident in Asia and you rent out a property in Ireland, you are classed as a non-resident landlord. You must declare this income to the Irish tax authorities and you will be liable for tax on it.
Individual landlords are taxed at 20% if income is under the €42,000 threshold. Above that, the rate is 40%.
Universal Social Charge (USC) is also taxed on income above €13,000.
Pay Related Social Insurance (PRSI) does not apply to non-resident landlords.
Don’t forget that most rental properties should be declared with the Residential Tenancies Board (some exemptions do apply).
A major change to the law was announced in the Finance Act 2022. Aimed at tightening tax laws for landlords based abroad, it came into force on 1st July 2023 with the introduction of Non-Resident Landlord Withholding Tax. It is important that you make yourself aware of this relatively new tax and ensure that you are fulfilling your tax obligations.
Ireland’s new Non-Resident Landlord Withholding Tax (NLWT)
The new legislation introduced a Non-Resident Landlord Withholding Tax (NLWT).
Since 1st July 2023, tenants and collection agents are required to withhold a portion of rent from their non-resident landlord each month and pay it directly to the Revenue via a dedicated NLWT platform which can be accessed via the Revenue Online Service or myAccount. This is called a Rental Notification (RN).
Whereas previously collection agents and tenants could file a tax return with Revenue on behalf of a non-resident landlord, this is no longer the case.
In order to encourage compliance, all non-resident landlords must now file an income tax return annually in order to reclaim any withheld credits they are entitled to. This is done using Form 11.
The filing deadline for non-resident landlords is 31st October, or mid-November if you declare online. Failure to declare by these dates could lead to fines and late payment penalties.
The full process is outlined here.
Deductible expenses for Irish non-resident landlords
You can claim certain expenses against your income to reduce your tax liability. These include local authority rates, ground rent, insurance premiums, etc. You will find a comprehensive list here. You may also be able to claim Mortgage Interest Relief. Make sure you keep accurate records and copies of all receipts and invoices.
Residential Premises Rental Income Relief (RPRIR)
In addition, to ease the current housing crisis, the Irish government announced a temporary tax relief for landlords in the 2024 Budget. To benefit from this relief on a portion of rental income at a standard rate of 20%, landlords must keep their property in the rental market for four years. Between 2024 and 2027, landlords who comply can claim 20% of:
- €3,000 in 2024
- €4,000 in 2025
- €5,000 in 2026
- €5,000 in 2027
On that basis, landlords could save up to €600 in 2024, rising to €1,000 in 2026/7.
Detailed information from the Revenue can be found here.
Vacant home tax
Lastly, non-resident landlords should be aware of the vacant home tax introduced in 2023. This will be levied on properties occupied for less than 30 days in a 12-month period. It is an annual tax applied on 1st November each year. The rules are outlined in detail here.
With tax goalposts constantly changing, it is difficult for non-residents to keep track. If you are an Irish expatriate living in Asia, it is important to keep abreast of changes relating to your financial planning.
If you are an expatriate looking for financial planning advice, do get in touch for a free consultation.
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