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Most landlords in Ireland pay rental income tax at 20% or 40% on their rental profit, plus USC and PRSI. You do not pay tax on the rent itself. You pay it on what remains after you deduct the costs Revenue allows, and some reliefs can lower the bill further. Your salary matters as much as the property because rental profit adds to your other income.
Do I have to pay tax on rent I receive?
Yes. Revenue taxes rent from a property in Ireland as Case V income. Case V is Revenue’s term for income from letting land and buildings. It sits alongside your salary, pension, and other income when Revenue calculates your tax. There is no tax-free allowance for an ordinary letting, so that tax can apply from the first euro of profit.
The rules are the same whether your tenant is a stranger, a friend or a relative. Renting to a family member at a low rent does not remove the tax. Revenue looks at the rent you received and the costs you can justify and taxes the difference.
Most landlords report rental income on a Form 11 filed through Revenue’s Online Service (ROS). Some people with simple affairs can use a Form 12 instead. Which form applies depends on your total income and the types of income you have. The Form 11 vs Form 12 guide sets out the tests, so this post does not repeat them.
Which tax year does this guide cover?
Most people searching now are filing their 2025 return. The figures in the rest of this guide are for 2026. Use the table below to see the difference. The standard rate band (€44,000 for a single person) and the personal credit (€2,000) are the same in both years, so they are not repeated here.
| Item | 2025 | 2026 |
| Standard rate band (single) | €44,000 | €44,000 |
| USC 2% band ceiling | €27,382 | €28,700 |
| USC 3% band ceiling | €70,044 | €70,044 |
| PRSI (employee rate) | 4.1% to 30 September 2025, 4.2% from 1 October 2025 | 4.2% to 30 September, 2026, 2026,4.35% from 1 October, 2026 |
| Personal credit (single) | €2,000 | €2,000 |
| RPRIR cap | €800 | €1,000 |
How is rental income taxed? The 4-step sum
The calculation is the same for every landlord, whether you own one flat or several houses. Work through these four steps in order.
- Add up the rent you received during the tax year from all your tenants. If a tenant paid late, count the rent in the year you actually received it.
- Subtract the costs you can claim. What remains is your taxable rental profit. Section 4 lists the costs that qualify. If you let more than one property, work out the rent and costs for each one separately.
- Tax the profit at your rate, then subtract RPRIR if you qualify. Income tax is calculated on your profit plus your other income, so the rate depends on where that profit lands.
- Add USC and PRSI. These are charged on the rental profit too, using the same rules that apply to your salary.
The second step is where most landlords go wrong. Your profit sits on top of your salary, so you usually pay the highest rate. If your salary already fills the 20% band, you pay 40% on every euro of rental profit. That is why two landlords with the same rent can end up with very different bills.
What tax rates will I pay on rental profit in 2026?
The table below shows the 2026 rates for a single person. Rental profit is taxed at the same rates as your salary, so the bands apply to your total income.
| Tax | Rate | Applies to |
| Income tax | 20% | Income up to €44,000 |
| Income tax | 40% | Income above €44,000 |
| USC | 0.50% | First €12,012 |
| USC | 2% | €12,012 to €28,700 |
| USC | 3% | €28,700 to €70,044 |
| USC | 8% | Above €70,044 |
| PRSI | 4.20% | Up to 30 September 2026 |
| PRSI | 4.35% | From 1 October 2026 |
USC stands for Universal Social Charge, a tax that funds public services. PRSI stands for Pay Related Social Insurance, which builds your entitlement to benefits such as the State Pension. The PRSI rate changes partway through 2026, from 4.2% to 4.35% on 1 October. Across the full year, it works out to a blended 4.2375%, and the examples in this guide use that rate.
Do I pay USC and PRSI on rental income?
Yes. USC applies to your rental profit in the same way it applies to your salary, using the bands in the table above. Because your profit is added to your salary, most of it usually falls into the higher USC bands.
PRSI on rental income is charged at Class K. If you are a PAYE employee and your rent and other unearned income come to less than €5,000 a year, you do not pay PRSI on it. Once that total exceeds €5,000, PRSI applies to the full amount, not just the amount above €5,000. PRSI is not charged on people under 16 or over 70. The €650 minimum PRSI payment applies to Class S contributors, who are usually self-employed, so it does not apply to Class K.
What changes from Budget 2027?
The government announced Budget 2027 on 6 October 2026. The changes below start on 1 January 2027, so they do not affect your 2026 figures. The Finance Bill is not yet published, so details may still change before it becomes law.
- The standard rate band for a single person rises from €44,000 to €46,500.
- The personal, employee and earned income credits each rise by €125, to €2,125.
- The top of the 2% USC band rises from €28,700 to €30,300.
- The rent-a-room limit is set to rise to €16,000.
The budget coverage we reviewed did not mention any change to RPRIR, pre-letting relief or the retrofit deduction.
What rental expenses Ireland landlords can claim
You can deduct the costs you pay to run a letting, as long as they relate to the rental property and the rental period. Each allowable euro reduces your taxable profit, and so it reduces the tax on that profit. Keep a receipt for every cost, because revenue can ask for proof.
| Cost | Examples | Can I claim it? |
| Letting and management fees | Agent fees, rent collection charges | Yes. |
| Insurance | Landlord buildings and contents cover | Yes. |
| Repairs and maintenance | Fixing a leak, repainting, replacing a boiler with a like-for-like model | Yes. |
| RTB registration | The Residential Tenancies Board fee for each tenancy | Yes. |
| Accountancy fees | Preparing your rental accounts and return | Yes. |
| Advertising | Listing the property for new tenants | Yes. |
| Rates and ground rent | Charges the owner pays. | Yes. |
| Utilities | Bills you pay instead of the tenant | Yes. |
| Energy efficiency works. | Works backed by an approved SEAI grant | Yes, if conditions are met. |
The RTB registration fee is €40 a year for each tenancy. If you register late, an extra €10 is added for each month of delay. Register on time, because the penalty adds up quickly, and you can claim the fee as a deduction only once you pay it.
Repairs versus improvements
A repair puts a property back into the condition it was in. An improvement makes it better than it was before. You can claim repairs in full in the year you pay for them. You cannot claim improvements as running costs, although they may matter later when you sell the property.
| Repair (you can claim it) | Improvement (you cannot claim it) |
| Replacing a failed boiler with a similar model | Building an extension |
| Repainting a room in the same colour | Converting an attic into a bedroom |
| Fixing a leaking section of the roof | Adding a new bathroom |
When a job falls between the two, ask whether it restores what was there or adds something new. If you are unsure, keep the invoice and a written description of the work, and check the position before you file.
Retrofit deduction
Revenue allows small landlords to deduct certain energy-efficiency works that are supported by an approved SEAI grant. The works must be carried out between 1 January 2023 and 31 December 2028, and the deduction covers up to three properties for 2026 to 2028. Revenue’s guidance sets strict conditions, so read it before you claim.
If you are a sole trader looking for business expenses rather than rental costs, the sole trader expenses guide covers those rules separately.
What rental expenses Ireland landlords cannot claim.
Some costs look like running costs, but revenue does not allow them. The test is simple. If the cost keeps the property as it was, you may be able to claim it. If it adds to the property’s value or is a personal cost, you can’t claim it.
- The capital part of your mortgage repayments. Only the interest can be claimed.
- Local Property Tax (LPT).
- The value of your own time and labour.
- Purchase costs, such as stamp duty and legal fees, when buying the property.
- Capital improvements.
- Private or personal costs that have nothing to do with the letting.
- Income tax, USC and PRSI themselves.
Tip: Capital improvements and purchase costs can reduce your capital gains tax bill when you sell the property. Keep those invoices with your other property records, even though they do not reduce your rental profit each year.
Mortgage interest relief for landlords in Ireland
Mortgage interest is often a landlord’s highest cost, so it is worth getting right. You can deduct the interest portion of repayments on a loan used to buy, improve, or repair the rental property. The capital portion, which reduces the amount you owe, isn’t deductible. Your lender’s annual statement shows the interest figure you need.
You can claim the full interest only when both of these are true:
- The loan was used to buy, improve or repair the rental property.
- The tenancy is registered with the RTB.
If the tenancy is not registered, you cannot deduct the interest, and this is the single most costly mistake in the area. Example C in section 11 shows the effect.
You can claim interest while the property is let, and between tenancies, as long as you do not live in it yourself. Interest on a property that stands empty before its first letting is generally not deductible. Pre-letting relief, covered in section 8, is the main exception.
If your loan covers both a rental and a private purpose, such as a home you live in, split the interest on a reasonable basis and keep your workings. Revenue will expect to see how you reached the figure.
What about furniture and appliances?
You cannot deduct the full cost of furniture and appliances in the year you buy them. Instead, revenue gives you a wear-and-tear allowance. You claim 12.5% of the cost each year for 8 years, which spreads the cost over the working life of the items.
Take a new tenant who needs a washing machine, a fridge and two beds. If those items cost €2,400 in total, you claim €300 a year for eight years. The allowance covers furniture, white goods and similar equipment. It does not cover structural work such as rewiring or a new roof, which falls under the repairs and improvements rules in section 4.
Can I claim costs before my first tenant moved in?
Possibly. Pre-letting relief lets you claim certain costs on a property that stood empty before you let it for the first time. Without this relief, costs incurred before a tenant moves in are generally not deductible, so the relief can matter a great deal for a newly bought or refurbished property.
| Condition | Rule |
| Vacancy | The property was vacant for at least 6 months before letting |
| Timing | Costs were incurred in the 12 months before the first letting |
| Cap | €10,000 in total |
| Clawback | The relief is withdrawn if you take the property out of letting within 4 years |
| Deadline | The costs must be incurred before 31 December 2027 |
The costs must be the kind you could normally deduct during a tenancy, such as insurance, repairs, and mortgage interest. Costs such as stamp duty on the purchase are not covered. Because of the clawback, think about how long you plan to keep the property on the rental market before you claim.
Residential Premises Rental Income Relief (RPRIR)
Residential Premises Rental Income Relief reduces the income tax you pay on rental profit. You receive the lower of two amounts: 20% of your rental profit or the annual cap.
| Year | Cap |
| 2024 | €600 |
| 2025 | €800 |
| 2026 | €1,000 |
What to know about RPRIR:
- It reduces income tax only. It does not reduce USC or PRSI.
- It cannot create a refund. If your income tax is already zero, it has no effect.
- You get one RPRIR cap for each landlord each year, however many properties you let.
- The conditions are tested on 31 December of the year you claim.
Conditions:
- The tenancy is registered with the RTB, or the property is let to a local authority, or it is actively marketed for letting.
- You pay your LPT and hold a valid tax clearance certificate.
- You do not let the property be connected to a person. This is wider than close family. It includes siblings, aunts, uncles, nieces and nephews.
Clawback: If you sell, gift or take the property out of letting within 4 years of the first year you claim, the relief is clawed back. A change of use, such as turning the home into a holiday let, also triggers it, and so does letting it to a connected person. The landlord’s death does not trigger it, and neither does a period when the property is actively marketed.
Co-owners: Where two or more people own a property, the cap is shared between them in line with their share of the rent. Two 50% owners each receive half the cap.
RPRIR goes in its own section of your return. Do not enter it as an expense.
Free rental income tax calculator in Ireland
Want to estimate your own bill? Try our free rental income tax calculator below: enter your figures and see your taxable profit, income tax, USC, PRSI, and the amount you keep after tax.
Real-Life Examples
All three examples use 2026 rates for a single person and assume that personal and PAYE credits are already used against salary. Each one shows the full calculation so that you can check the arithmetic yourself.
Example A: PAYE employee with one registered rental
A single person earns €38,000 a year and lets one property at €1,200 a month. The tenancy is registered with the RTB, and the landlord has a mortgage on the property.
| Line | Amount |
| Rent received (€1,200 x 12) | €14,400 |
| Insurance | -€480 |
| Repairs and maintenance | -€900 |
| RTB registration fee | -€40 |
| Accountancy fee | -€300 |
| Qualifying mortgage interest | -€3,600 |
| Wear and tear (12.5% of €3,000) | -€375 |
| Taxable rental profit | €8,705 |
| Income tax: €6,000 at 20% plus €2,705 at 40% | €1,200 + €1,082 = €2,282 |
| Less RPRIR (lower of €1,000 and 20% of €8,705) | -€1,000 |
| Income tax payable | €1,282 |
| USC at 3% | €261 |
| PRSI at 4.2375% | €369 |
| Total tax on the rent | €1,912 (about 22% of the profit) |
| Profit after tax | €6,793 |
Only €6,000 of the profit falls within the 20% band because the salary already uses €38,000 of it. Mortgage interest relief and RPRIR keep the bill much lower than it would otherwise be.
Example B: jointly owned rental property in Ireland
Two siblings own a property 50:50 and are assessed separately. The rent is €18,000 a year. Costs include mortgage interest (€4,800), insurance (€600), repairs (€900), RTB fee (€40), and accountancy (€360). The profit is €11,300, which each owner receives as €5,650. Owner 1 earns €60,000 from salary. Owner 2 earns €30,000.
| Line | Owner 1 (€60,000 salary) | Owner 2 (€30,000 salary) |
| Share of rental profit | €5,650 | €5,650 |
| Income tax before relief | €2,260 (all at 40%) | €1,130 (all at 20%) |
| RPRIR (half the €1,000 cap) | – €500 | – €500 |
| Income tax payable | €1,760 | €630 |
| USC at 3% | €170 | €170 |
| PRSI at 4.2375% | €239 | €239 |
| Total tax on the rent | €2,169 | €1,039 |
The same rental profit costs one owner more than twice as much as the other. The difference comes from each owner’s salary. Each owner’s share of RPRIR is half of the €1,000 cap.
Example C: the tenancy is not registered with the RTB
This is the landlord from Example A, but the tenancy has never been registered with the RTB. The landlord can no longer deduct the €3,600 in mortgage interest, RPRIR is not available, and the registration fee is not claimed.
| Line | Amount |
| Rent received | €14,400 |
| Insurance, repairs, accountancy and wear and tear | -€2,055 |
| Taxable rental profit | €12,345 |
| Income tax: €6,000 at 20% plus €6,345 at 40% | €1,200 + €2,538 = €3,738 |
| RPRIR | Not available |
| USC at 3% | €370 |
| PRSI at 4.2375% | €523 |
| Total tax on the rent | €4,631 |
| Difference from Example A | About €2,720 more |
Registering the tenancy saves about €2,720 in this case, for a €40 fee.
How to declare rental income in Ireland: Form 11 or Form 12
Most landlords file a Form 11 through ROS. Some use a Form 12 through myAccount. The Form 11 vs Form 12 guide explains which one applies to you. Once you know the form, the rental figures go in a predictable place.
On the return, you will enter:
- Gross rent for each property.
- Costs by category, using the same groups as your records.
- Mortgage interest in its own field, not within general costs.
- Capital allowances for furniture and appliances.
- Any losses brought forward from earlier years.
- RPRIR in its own section, not as an expense.
Deadline box: The 2025 return is due on 31 October 2026. If you file and pay through ROS, the deadline extends to 18 November 2026. Preliminary tax for 2026 falls due on the same extended date. If you are filing the 2025 return, use the 2025 thresholds and rates, because the figures in this guide are for 2026. The deadlines and surcharges guide explains what happens if you miss a date.
Quick answers on Airbnb, Rent-a-Room, Family Tenants and Non-Resident Landlords
These four cases follow different rules from the long-term residential letting covered above. Each one will have its own guide. The short answers below show whether the rules in this post apply to you.
Airbnb and short-term lets
Revenue usually treats short-term lets as Case IV or Case I income rather than Case V, which is the category this guide covers. Income from short-term lets is generally taxable in Ireland. The rules on allowable costs and reliefs differ from a standard long-term tenancy. RPRIR is aimed at residential tenancies, so do not assume it applies to a short-term let.
Rent-a-room
If you rent a room in your own home, the first €14,000 a year can be exempt in 2026. Budget 2027 is set to raise that limit to €16,000 and extend the relief to certain designated auxiliary dwellings installed after 27 July 2026. Check the final rules once the Finance Bill is published.
Family tenants
Rent from a relative is taxable like any other rent. Letting to a connected person also removes your RPRIR, and it can trigger clawback on relief you have already claimed.
Non-resident landlords
Rent from an Irish property is taxable in Ireland even if you live abroad. The tenant or a letting agent may have to deduct tax at source before paying you.
What records should I keep?
Revenue can ask to see your records during a review or audit, so keep them together in one place. Keep these for 6 years:
- The tenancy agreement.
- A record of rent received.
- Receipts for every expense.
- Your RTB registration confirmation.
- Your mortgage interest certificate.
- Invoices for furniture and appliances.
A simple monthly routine stops the year-end rush. Match the rent to your bank statement, file each receipt as it arrives, and mark each job as a repair or an improvement while the details are still fresh. The document checklist lists everything to gather for a return. If you would rather hand off the work, our outsourced bookkeeping service can keep your rent and cost records in order.
Common Mistakes Landlords Make
Most errors come from a few habits you can avoid once you know them. Check each one before you file, because correcting a return after Revenue spots a mistake takes longer and can cost more.
Treating rent as profit. You pay tax only on the profit left after allowable costs and interest relief. Keep a full record of every cost.
Not registering the tenancy. RTB registration is a condition for mortgage interest relief and RPRIR. Example C shows that skipping it can cost well over €2,000 a year, far more than the €40 fee.
Claiming improvements as repairs. A new kitchen or an extension adds value, so you can’t claim it as a running cost. Describe each job accurately on the invoice.
Claiming capital repayments or LPT. Only the interest part of a mortgage is deductible, and Local Property Tax is not a rental expense.
Forgetting USC and PRSI. Income tax is only part of the bill. USC and PRSI apply to the same profit.
Missing preliminary tax. It is paid in advance for the current year, so check the 2026 amount before the due date.
Entering RPRIR as an expense. RPRIR is a tax credit, not a cost. It belongs in its own section of the return.
Frequently asked questions
Is rent taxed at 20% or 40%?
Rent isn’t taxed at a single fixed rate. Your rental profit is added to your salary, and the portion that falls within the €44,000 band for a single person in 2026 is taxed at 20%. Anything above that is taxed at 40%. A landlord on a low salary may pay 20% on most of the profit, while one whose salary already reaches €44,000 pays 40% on all of it.
Do I pay USC and PRSI on rent?
Yes. USC applies to rental profit using the standard bands, and PRSI is charged at Class K. A PAYE employee does not pay PRSI if their rent and other unearned income total less than €5,000 a year. Once the total goes over €5,000, PRSI applies to all of it.
Can I deduct my mortgage payments?
Only the interest part, and only if the tenancy is registered with the RTB. The capital part reduces your loan and cannot be claimed. Your lender’s annual statement shows the interest figure you need.
Is the security deposit taxable?
No, not when you receive it. A deposit you hold for the tenant is not rent. If you keep part of it at the end of the tenancy, for example to cover damage, that retained amount is treated as rent and is taxable in the year you keep it.
What if I make a loss on my rental?
If your rental costs exceed your rent, the loss carries forward against future Irish rental profit, after you deduct any capital allowances for furniture and appliances. It cannot be carried back, cannot be set against your salary or foreign rental income, and cannot be used against your spouse’s or civil partner’s rental profit.
Do I pay tax if the property is jointly owned?
Yes. Each owner is taxed on their share of the profit at their own rates, and RPRIR is shared in line with each owner’s share of the rent. Other income can make a large difference, as Example B shows.
Do I need to register with the RTB to claim?
Yes. Registration is needed to claim mortgage interest and RPRIR. It costs €40 a year for each tenancy, plus €10 for each month you register late.
How long should I keep my rental records?
Keep them for 6 years after the end of the tax year they relate to. For example, keep records for 2026 until at least the end of 2032.
