Tax issues for tenants

Introduction

If you pay rent directly to a landlord who lives abroad, you must deduct tax from the rent and account for it to Revenue – see 'Landlords living abroad' below.

Up until 2017, you could claim a tax credit if you paid for private rented accommodation. This is no longer available. But, you were able to claim it up until 2021, as tax reliefs can be claimed within 4 years. Find out how this relief worked in 'Tax relief' below.

Visit Revenue's website for more information on these tax issues.

Landlords living abroad

If your landlord lives outside Ireland and you pay your rent through a collection agent, you do not have to deduct tax from the rent. A collection agent is someone who will make annual tax returns for the non-resident landlord and 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 accountant. The landlord’s collection agent must account for the tax in an annual tax return.

However, if you pay the rent directly to the landlord (including into their bank account, whether in Ireland or abroad), you must deduct tax at the standard rate (20%) from the gross amount that you pay. This deduction is not your tax relief - it is tax payable 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.

Accounting to Revenue for tax deducted from rent

You must account to Revenue for the tax that you deduct from the gross rent. If you fail to deduct tax from rent that you pay directly to a landlord living outside Ireland, this will mean that you (and not the landlord) will be liable for any tax that should have been deducted.

If you pay tax under PAYE, you can account for it by reducing your tax credits and Standard Rate Cut-Off Point. You can notify your local Revenue Office and ask them to arrange this. Alternatively, you can make a tax return and pay the retained amount to Revenue. You can do this by completing the eForm12 on Revenue’s MyAccount Service, or by filling in a paper Form 12 (pdf) and sending it back to Revenue.

If you pay tax under self-assessment, you should include the details of your rent on your annual return. You can do this by filing your online Form 11 using the Revenue Online Service (ROS), or by filling in the paper Form 11 (pdf) and returning it to Revenue. A notice of assessment will then issue to you, showing the reduced credit.

At the end of the year you must give your landlord a completed Certificate of Income Tax Deducted - Form R185 (pdf).

Tax relief

This tax credit on your rent ended in 2017. However, you are able to claim tax reliefs for the previous 4 years. So, you could claim it for the year 2017 up until 2021.

To be eligible for this tax credit you must have:

  • Been renting accommodation privately (whether in Ireland or outside the State) and paid income tax
  • Been renting on 7 December 2010
  • Used the rented accommodation as your sole or main residence

You could not claim tax relief for rent paid to a local authority or a State agency, or for rent paid under a lease agreement for 50 years or more.

Tax relief on private rented accommodation was calculated at the standard rate of 20%. There were maximum amounts that you could claim relief on.

Page edited: 12 April 2022