Dáil Éireann Debate, Thursday - 19 February 2026
263. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to reduce taxation on rental income as such a measure will encourage members of the public to invest in or construct rental properties; and if he will make a statement on the matter. [13844/26]
Amharc ar fhreagraLandlords are an essential feature of a functioning housing market. Rising rents are driven by a shortage of supply, so stabilising and increasing the supply of rental properties should ease upward pressure on rental prices and make it easier for prospective tenants to find affordable homes.
While rental profits may be subject to income tax, PRSI and USC at an individual’s marginal tax rate, the effective rate will in most cases be lower, when taking into account amounts taxed at the standard rate of income tax and depending on the circumstances, the reliefs, credits and deductions can be taken from rental income in arriving at rental profits for tax purposes.
Income from renting Irish property is taxed under what is known as Case V of Schedule D, and the amount subject to tax is the rental profits calculated after taking the deductions allowed under section 97(2) Taxes Consolidation Act 1997, which are: rent payable by the landlord for the rental premises; rates payable by the landlord for the rental premises (but not Local Property Tax); the cost of goods and services in relation to letting the property; the cost of maintenance, repairs, insurance and management of the property, excluding capital expenditure; and interest on money borrowed to purchase or improve the premises, so long as the landlord meets the registration requirements under the Residential Tenancies Act 2004.
A landlord may be able to claim capital allowances for capital expenditure under section 284 TCA; pre-letting expenses under section 97A TCA; and retrofitting expenditure under section 97B TCA. Landlords who are individuals and who are letting residential premises can also claim the residential premises rental income relief under section 480C TCA, which is €800 for 2025 and €1,000 in 2026 and 2027.
Section 216A TCA provides that, if a landlord is letting a rent a room or rooms in her own sole or main residence and the amounts received for rent and other services (such as laundry or meals) does not exceed €14,000, the sums are fully relieved from income tax under “rent-a-room” relief.
It is important that any proposals regarding further new reliefs are carefully thought out to ensure that they are targeted and have the intended effect.
Decisions regarding tax incentives and reliefs are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.
