There are a lot of expenses that you can claim in order to reduce your tax liability. Tax can be confusing, and many Landlords are unsure of their obligations and entitlements, meaning you often don’t claim back what you are entitled to and miss out on potential savings.
Allowable expenses include:
- Residential Tenancies Board (RTB) registration.
- Insurance premiums against fire and public liability.
- Maintenance of your property such as cleaning, painting and decorating. You can deduct these costs as well as wear and tear expenses such as the price of furnishings and fittings.
- Repairs, such as rot treatment, mending windows, doors or roof slates.
- Property fees before you first rent out your property such as management/ agency, advertising, legal or accountancy fees.
- Cost of any service or goods you provide that are not repaid by your tenant (such as electricity, central heating, telephone, service charges, water and refuse collection).
- Certain mortgage protection policy premiums.
- Capital allowances.
- Expenses in between renting out the property in certain circumstances.
Expenditure between lettings:
Allowable expenditure incurred in the period between the termination of one lease and the granting of another lease by the same landlord is deductible provided the landlord was not in occupation of the premises during that period.
- Certain pre-letting expenses on vacant residential property.
Pre-letting expenses, i.e. expenses incurred prior to the date on which the premises was first let are not deductible apart from auctioneer’s letting fees, advertising fees and legal expenses incurred on first lettings*
( Expenditure incurred in repairing and putting into a fit state for letting a property acquired in a dilapidated condition is normally inadmissible as a deduction under Case V of Schedule D. For Capital Gains Tax purposes, however, such expenditure (including expenditure on decorations) may, in general, be regarded as allowable expenditure e.g. like enhancement expenditure)
Pre-letting expenses in respect of vacant residential premises:
Expenditure on a premises which has been vacant for at least 12 months and which is then let as a residential premises between 25th December 2017 and 31 December 2021 and the expenditure is incurred in the 12 months before the premises is let as a residential premises, then the expenditure would be allowable as a case V deduction. The deduction authorised is capped at €5,000 per vacant premises.
16th Nov 2022
Note* Expected in the Finance (not law at time of this note). The tax deduction for pre-letting expenses on vacant residential properties has doubled to €10,000 per property. The period of time a property must have been vacant to claim these expenses has been reduced from 12 months to 6 months. A Vacant Homes Tax (VHT) will be introduced in 2023.
There are a few expenses you can’t include on your list of expenses including:
- Post-letting expenses, i.e. expenses incurred after the final letting are not deductible.
- Interest you’re changed from the time you buy a property to when it’s first rented.
- Any cost for your own labour when carrying out repairs to the property.
- Stamp Duty.
- Local Property Tax (LPT).
We suggest that you review Revenue’s Guide to Rental Income IT70 for detailed information – Click HERE