Rental Income and Tax in Ireland
If you rent out a property in Ireland, the rental profit (income minus allowable expenses) is subject to income tax, USC, and PRSI. You must declare rental income even if you are also in PAYE employment.
Updated for 2026 Revenue rates.
Do You Need to Register?
Yes. You must register your tenancy with the Residential Tenancies Board (RTB) within one month of the tenancy starting. Failure to register can result in penalties and may affect your ability to deduct certain expenses. RTB registration costs €90 per tenancy (annual fee).
Additionally, you must register for self-assessment with Revenue if your rental income (combined with other non-PAYE income) exceeds €5,000 per year.
Calculating Taxable Rental Profit
Your taxable profit is: Gross rent received − Allowable expenses. The profit is then added to your other income (employment, self-employment, etc.) and taxed at your marginal rate (20% or 40%), plus USC and PRSI.
Allowable Expenses
You can deduct the following expenses from your rental income:
- Mortgage interest — 100% of interest on loans used to purchase, improve, or repair the rental property (restrictions applied in prior years have been phased out)
- Repairs and maintenance — routine repairs, painting, plumbing, electrical work
- Insurance — landlord insurance, building insurance
- Management fees — property management agent fees, letting agent fees
- RTB registration fee
- Local Property Tax (LPT) — on the rental property
- Professional fees — accountant fees for preparing rental accounts, legal fees for lease agreements
- Utilities — if you pay for electricity, gas, internet, bin charges on behalf of the tenant
- Ground rent and service charges
- Advertising costs — for finding tenants
Non-Allowable Expenses
You cannot deduct:
- Capital costs of purchasing the property (these are capital acquisitions, not income expenses)
- Capital improvements that increase the value of the property (e.g. extension, new kitchen) — these may qualify for capital allowances instead
- Your own labour (you cannot charge a notional wage)
- Personal use portion — if you use the property personally for part of the year, expenses must be apportioned
Capital Allowances for Rental Properties
Certain capital expenditures qualify for wear-and-tear allowances (capital allowances):
- Furniture, fittings, and appliances — 12.5% per year over 8 years
- Energy efficiency improvements — accelerated allowances may be available
Pre-Trading Expenses
Expenses incurred in the 7 years before you started renting (e.g., advertising, legal fees) can be treated as incurred on the first day of trading and deducted against rental income.
Losses
If your allowable expenses exceed your rental income in a tax year, you can carry forward the loss to offset against future rental profits from the same property.
Filing Rental Income
Rental income is declared on Form 11 (self-assessment) or Form 12 (PAYE employees with small rental income). Use Revenue's online portal myAccount or ROS.
How rental income is taxed in 2026
Rental profit — gross rent minus allowable expenses — is added to your other income and taxed at your marginal rate (20% or 40%), plus USC and PRSI. Since 2025, mortgage interest is 100% deductible (the phased restrictions are over), which is a major improvement for landlords. Other allowable expenses: repairs and maintenance, insurance, management/letting agent fees, the RTB registration fee, Local Property Tax, utilities you pay on the tenant's behalf, advertising, and professional fees. Capital improvements (extensions, new kitchens) are not deductible as expenses but may qualify for wear-and-tear capital allowances (12.5% a year over 8 years for plant and equipment). You cannot claim expenses on an unregistered tenancy — RTB registration is a condition of deducting expenses, so register within a month of the tenancy starting.
Registration and returns
Landlords must register with the RTB (€90 a year online per tenancy) and, for tax, register for Income Tax if their non-PAYE income requires it — PAYE employees with rental income can usually declare it through the annual return in myAccount, while those with substantial rental or other non-PAYE income file a Form 11 through ROS with preliminary tax by 31 October. Keep a separate bank account for the rental property and a ledger of income and expenses — Revenue can ask for full records for 6 years. If you let through an agent, you are still responsible for declaring the income.
Rent-a-Room: the €14,000 tax-free option
If you rent out a room in your own home, the Rent-a-Room scheme lets you earn up to €14,000 a year tax-free (no income tax, USC or PRSI on it). The room must be in your principal private residence, the arrangement must last at least 28 consecutive days, and the occupant must not be an employee or immediate family member. Income above €14,000 is taxed in full on the excess, so if your Rent-a-Room income is near the limit, review the figures — and note that Rent-a-Room income does not affect the Household Benefits Package. Short-term lettings (Airbnb-style) of a room do not qualify for Rent-a-Room relief; they are taxable trading income.
Action steps
- Register the tenancy with the RTB within 30 days — required for expense deductibility.
- Track every expense with receipts; claim 100% mortgage interest for 2025-2026.
- Set aside 30-40% of net rent for tax so the October 31 payment is painless.
- If you rent out a room in your own home, confirm your income is within the €14,000 Rent-a-Room limit.