Tax relief and other tax issues for people renting
Rent Tax Credit
A Rent Tax Credit was introduced in December 2022 for people who pay for private rented accommodation.
The credit will be available for 2022 until 2025.
You can claim the tax credit for rent paid in 2022 by making a tax return for 2022. You can claim the tax credit during the year for other years.
How much is the Rent Tax Credit?
The Rent Tax Credit is 20% of the rent you paid in a year, up to a maximum of €500 per person, or €1,000, if you are a couple jointly assessed for tax.
In Budget 2024, the Rent Tax Credit was increased to €750 per individual and €1,500 per jointly assessed couple for 2024 and 2025.
Who can get the Rent Tax Credit?
The tax credit is available for rent you have paid for:
- Your home
- A second home you use to take part in an approved course or your work
- A property your child uses so they can take part in an approved course. This only applies if your child is under 23 at the start of their first year.
To claim the credit your tenancy must be registered with the Residential Tenancies Board (RTB), unless you have a licence arrangement. For example, if you are renting a room in a home that you share with the owner, you have a licence agreement and this does not have to be registered with the RTB.
In Budget 2024, it was announced that payments made by parents for digs or rent-a-room arrangements for their children to attend an approved course will now also qualify for the Rent Tax Credit. This change will apply retrospectively for the years 2022 and 2023.
There is more information about this credit in our Rent Tax Credit page
Landlords living abroad
If your landlord lives outside Ireland, they still need to declare their rental income to Revenue and pay tax on it. They can do this by:
- Getting you to withhold 20% of your gross rent and then pay this to Revenue
- Using a collection agent to withhold 20% of the tenant's rent to pay this to Revenue
If I pay rent through a collection agent
If you pay your rent to a collection agent, you do not have to deduct tax from the rent. A collection agent is someone who will account for any tax due to Revenue.
A collection agent can be someone the landlord knows, like a friend or family member, but are often a professional such as a letting agent or solicitor. Since 1 July 2023, collection agents can withhold 20% of your rental payment and pay it directly to Revenue through a new Non-Resident Landlord Withholding Tax System (NLWT). This system is available in MyAccount and ROS.
Collection agents no longer have to submit a tax return for the non-resident landlord. The landlord is responsible for filing their own tax return.
If I pay rent directly to my landlord who lives abroad
If you pay the rent directly to your landlord who lives abroad, you must deduct 20% from the rent and pay this to Revenue. The deduction is 20%, because 20% is the standard rate of tax.
This applies even if you pay your rent directly into their bank account, whether in Ireland or abroad. The deduction is not your tax relief, it is tax to be paid to Revenue from your landlord's income.
For example, your landlord lives in Germany and you pay them gross rent per month of €1,000. First, work out the amount of tax to be deducted (€1,000 x 20% = €200). Now deduct the tax due from the gross rent you pay (€1,000 - €200 = €800). The net rent to be paid to your landlord is €800 per month. The amount due to Revenue is the €200 per month that you deducted from the gross rent of €1,000.
How do I pay Revenue for the tax deducted from rent?
You must account to Revenue for the tax that you deduct from the gross rent. If you do not deduct tax from rent that you pay directly to a landlord living outside Ireland, you are liable for any tax that should have been deducted, not your landlord.
On 1 July 2023, the way you do this changed. You no longer have to use your personal tax return to deduct tax from rent payments to your non-resident landlord.
You must make a Rental Notification when you make these payments. The Rental Notification includes details about the landlord and the rental property. You must make the Rental Notification and 20% payment to Revenue within 21 days of paying rent to the landlord.
You can set-up repeat Rental Notifications and payments in the new system. This means that Rental Notifications and payments will be automatically made to Revenue every month.
How the system used to work
Before 1 July 2023, you had to use your personal tax return to account for your landlord’s tax on rental payments. You could account for it by:
- Reducing your tax credits and Standard Rate Cut-Off Point, if you paid tax under PAYE
- Including the details of your rent on your annual return, if you paid tax under self-assessment
Then at the end of the year, you had to give your landlord a completed Certificate of Income Tax Deducted - Form R185 (pdf).