Ireland: Worked Example of Tax on Rent
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Tax Example: Rent
| Non-resident couple's joint monthly rental income1 | €1,500 | €6,000 | €12,000 | |
| Annual Rental Income2 | 18,000 | 72,000 | 144,000 | |
| Less Costs3 | (3,600) | (14,400) | (28,800) | |
| Less Depreciation4 | (5,357) | (16,071) | (35,573) | |
| = Taxable Income | 9,043 | 41,529 | 79,627 | |
| Income Tax Rates5 | ||||
| Up to €68,000 | 20% | 1,809 | 8,306 | 13,600 |
| Over €68,000 | 41% | 4,768 | ||
| Annual Income Tax Due | €1,809 | €8,306 | €18,368 | |
| Additional Tax | ||||
| Health Levy6 | 2% | - | - | 1,592 |
| Annual Income Tax Due | €1,809 | €8,306 | €19,961 | |
| Deductions | ||||
| Withholding Tax | 20% | (3,600) | (14,400) | (28,800) |
| Net Annual Tax Due | (€1,791) | (€6,094) | (€8,839) | |
| Tax Due as % of Gross Income | 10.05% | 11.54% | 13.86% | |
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on March 20, 2007.
Notes
Grant Thornton Ireland is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.
1 The property is jointly owned by husband and wife. Currently, lettings of less than ten years are exempt from VAT. It is possible to waive this exemption and if a ‘waiver’ is applied for, VAT should be charged at 21% on the monthly rents.
2 Rental income paid to a non-resident landlord is subject to 20% withholding tax. This tax is then available as a tax credit when the couple files their annual income tax return.
3 Estimated values. Income-generating expenses are all deductible from the gross rental income.
4 Capital allowances may be available on the cost of any fixtures and fittings provided with the building and the deduction is given over eight years (e.g. 12.5% per annum).
5 These income tax rates are applicable to a married couple with two incomes. A different set of tax bands is applicable for the following classification of taxpayers: single person, married couple with one income, one-parent family.
6 The 2% health levy is levied on the taxable income over €22,880 of each taxpayer. Once this threshold is exceeded, the health levy is applied on the whole taxable income.
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