Tax Issues On Buying And Renting Residential Property In Ireland

Perhaps you’re thinking of moving to live in Ireland, or maybe you already live here.

What are the tax issues you need to be aware of on buying or renting a residential property?

Renting…

When you rent a residential property then there is no tax relief available on the rent you pay. This applies whether you’re renting from a landlord or sharing a house with someone else.

If you run a business from home then it may be possible to claim a proportion of your rent cost as a business expense in your accounts. This would depend on how much the business uses the home.

Be careful though, many rental agreements include terms that prevent running a business from the property. If you breach those terms you could end up having a problem with your landlord.

Buying…

Mortgage

If you use a mortgage to buy a house for you to live in, then there’s no tax relief on either the loan amount or the interest.

There is mortgage interest relief available for some mortgages taken out between 2004 and 2012, but this will be phased out by the end of 2017. Mortgages taken out from January 1, 2013 onwards get no relief.

Stamp Duty

When you buy a house in Ireland then you’re likely to need to pay stamp duty. This is a tax based on the value of the property being bought.

Currently, stamp duty is charged at 1% on the first €1,000,000 and then 2% on any excess over this.

Rent-a-room

If you rent out a room in your home then the income you get is likely to be exempt from tax provided that the total amount you receive is below €12,000.

This amount includes any amounts you receive for rent, meals and any other services you supply.

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