10th October 2023
The following Budgetary changes may make a difference to your private rental investment.
Rented Residential Relief
A new tax relief for landlords is being introduced. It will provide a relief, at the standard rate, of residential rental income.
The relief will be as follows:
€3,000 in the tax year 2024;
€4,000 in 2025,
€5,000 in 2026 and
€5,000 in 2027.
A full claw-back of the benefit of the relief applies in the event the landlord removes from the rental market, within 4 years, any of the rental properties held in year 1 when the benefit is claimed.
There is no clawback after the expiry of the 4-year period. The relief relates only to tenancies registered with the Residential Tenancies Board, or where a landlord lets a residential property to a public authority (including a Local Authority).
In the case of joint ownership of a property, the relief will be divided in proportion to the percentage of the rental income to which each owner is entitled. Further detail will be set out in the Finance Bill.
Rent Tax Credit
The rent tax credit is being amended to increase the amount that can be claimed from €500 to €750. As before, the credit will be available to renters who are not already availing of State housing supports.
The proposal relates only to tenancies registered with the Residential Tenancies Board and licences for the use of a room in another person’s principal private residence. Eligibility for the credit will be extended to parents who pay for their student children’s rental accommodation in the case of Rent a Room accommodation or “digs”. This change will also apply retrospectively to the years 2022 and 2023.
Vacant Homes Tax
The rate of the Vacant Homes Tax is being increased from three times to five times a property’s existing base Local Property Tax liability. This increase will take effect from the next chargeable period, commencing 1 November 2023.