Rental profit in Ireland is taxed at your marginal rate, either 20% or 40%, plus USC and PRSI on top. The formula is gross rent minus allowable expenses equals taxable profit. Everything else, the reliefs, the deductions, and where landlords typically get the number wrong, sits inside that second step.
Most online calculators stop at that formula. They ask for a rent figure and an expenses figure, apply a flat rate, and hand back a number that ignores the reliefs specific to your situation. A calculator can’t know whether your mortgage interest actually qualifies, whether you’re eligible for this year’s landlord relief, or whether a repair you made last year was actually a capital improvement in disguise. Those distinctions change the final figure more than the calculator itself does.
The Three Charges Behind Every Rental Tax Bill
Rental income falls under Case V of Schedule D, and it gets added to your other income for the year rather than taxed on its own. Three separate charges apply to the resulting profit.
Income tax runs at 20% up to your standard rate band, then 40% above it, based on your total income from all sources, not just the rental figure on its own. USC applies on a sliding scale from roughly 0.5% up to 8% depending on total income. PRSI, usually Class S for a self-employed landlord, runs at 4% of the rental profit itself.
Working Through an Actual Example
A landlord with one rental property earning €16,000 a year in rent, with €5,200 in allowable expenses (mortgage interest, insurance, repairs, and letting fees combined), arrives at a taxable rental profit of €10,800.
| Item | Amount |
| Gross rental income | €16,000 |
| Allowable expenses | €5,200 |
| Taxable rental profit | €10,800 |
| Income tax (assuming 40% marginal rate) | €4,320 |
| USC (blended estimate) | ≈ €324 |
| PRSI (Class S, 4%) | €432 |
That puts the combined tax bill on this property at roughly €5,076 before any landlord-specific relief is applied. For a landlord already paying tax at the higher rate through PAYE employment, the whole €10,800 gets taxed at 40%, since rental profit stacks on top of existing income rather than using its own separate band.
What Actually Counts as an Allowable Expense
Mortgage interest is 100% deductible against rental income, but only if the tenancy is registered with the Residential Tenancies Board. Skip that registration and Revenue disallows the interest deduction for the period the property wasn’t registered, which is a bigger cost than most landlords expect from a single missed form.
Repairs and maintenance qualify. A new boiler replacing a broken one qualifies. A boiler upgrade that adds a feature the old one never had, or an extension, doesn’t, because Revenue treats that as a capital improvement rather than a repair. Capital improvements don’t reduce rental tax at all. They reduce the capital gains tax bill whenever the property eventually gets sold, which is a different calculation on a different tax entirely.
Furniture and fittings get their own treatment through wear and tear allowances rather than a straight deduction. Revenue allows 12.5% of the cost per year over eight years, so €8,000 spent furnishing a rental property works out to €1,000 a year set against rental profit, every year, for eight years.
The Relief Most Landlords Miscalculate
Residential Premises Rental Income Relief is worth up to €1,000 against income tax for 2026 and 2027, up from €800 in 2025 and €600 in 2024. It reduces income tax only, not USC or PRSI, and it isn’t refundable if your income tax bill is smaller than the relief itself.
The actual amount available is whichever is lower: the fixed cap for the year, or 20% of your Case V rental profit. A landlord with only €3,000 in rental profit qualifies for a maximum of €600 in relief for 2026, not the full €1,000, since 20% of €3,000 is the smaller figure.
Claiming it requires holding a valid Tax Clearance Certificate, being compliant with Local Property Tax, and having the tenancy registered with the RTB, all as of 31 December in the relevant year. The clawback is where this catches people out. Dispose of the property, or switch it to short-term letting such as Airbnb, within four years of first claiming the relief, and Revenue claws back every year’s relief already given, not just the year the change happened.
Non-Resident Landlords Are Now Explicitly Covered
Revenue updated its guidance on this relief in March 2026 to clarify how it applies to landlords living outside Ireland. Anyone managing an Irish rental property from abroad, or working through a tax clearance for non-residents arrangement, should check the current eligibility rules rather than assuming an older version of the guidance still applies.
A Relief for Property That Sat Empty
Section 97A lets a landlord deduct up to €10,000 in pre-letting expenses against rental income, covering costs like repairs, insurance, advertising, and even mortgage interest incurred before the tenant moved in. The property has to have been vacant for at least six months, and the expenditure has to fall within the 12 months immediately before the first letting.
The condition that trips people up is the same four-year rule that applies to RPRIR. Claim the deduction and then stop letting the property as a residential premises within four years, and the relief gets clawed back retroactively. This relief currently runs to expenditure incurred up to 31 December 2027, so it isn’t a permanent feature of the tax system.
Why the Number Still Needs Checking Against Your Own Return
Every example above assumes one property, one landlord, and no other complications. Add a second property, a spouse who’s a joint owner, PAYE income that shifts which tax band the rental profit falls into, or a partial year of letting, and the calculation stops being something a generic online tool can get right. Getting the income tax return filed with the correct figure the first time avoids a Revenue query later over a number that looked close enough but wasn’t quite right.
Frequently Asked Questions
Does rental income get its own tax band separate from my salary?
No. Rental profit is added to your total income for the year, and taxed at whatever rate applies once it’s combined with your salary or other earnings. A PAYE employee already in the higher rate band pays 40% on the full rental profit.
Is Local Property Tax deductible against rental income?
No. LPT is one of the few landlord costs Revenue specifically excludes from allowable expenses, regardless of how directly it relates to owning the rental property.
Can I claim RPRIR on more than one rental property?
The relief applies once per landlord per year, calculated against your combined Case V profit across all qualifying properties, not once per individual property owned.
What happens if I only rent the property for part of the year?
Expenses and reliefs are generally apportioned to the period the property was actually let, so a mid-year start date reduces both the taxable profit and the expenses that can be set against it.
Do I need an accountant if I only have one rental property?
Not strictly, but the reliefs above have specific eligibility conditions and clawback triggers that are easy to miss on a first return, and the cost of getting one wrong tends to outweigh the cost of getting it checked.
Getting the Figure Right Before You File
A calculator gives a starting estimate. What actually determines the final bill is whether the mortgage interest qualifies, whether last year’s repair was really a repair, and whether a relief claimed this year survives the four-year clawback window attached to it. We handle rental profit calculations as part of our tax services for landlords across Ireland, checking each deduction and relief against the current rules rather than a flat percentage.
For the exact relief amounts and clawback conditions, Revenue’s own guidance on Residential Premises Rental Income Relief sets out the current rules directly, and the Tax and Duty Manual on the relief covers the clawback mechanics in full for anyone who wants the underlying detail.
