If you are living in Ireland and considering renting out your property or a room, you have to understand rental income tax. It means you have to pay 20% or 40% of your total rental income.
If you are thinking that it’s a lot of money to give away, then you are right. It is a lot of money. But don’t worry. There are many legal ways you can reduce your tax amount.
In 2025, the Irish government offers several reliefs and exemptions that can help you keep more of your rental income. All you need to do is understand how to avoid rental income tax. In this blog, we will tell you everything you need to know about rental income tax.
How to Avoid Rental Income Tax in Ireland (2025 Update)
If you are renting out your property or your room in Ireland, one thing you must have encountered is rental income tax. Every year, you have to pay a portion of your rental income profits to the Irish government.
But there are many legal ways you can reduce your rental income tax. From claiming allowed expenses to using government relief schemes, there are smart strategies that can help you keep more of your rental income.
In 2025, the rules are clearer than ever. By understanding how to avoid rental income tax, you can save both your time and money.
What Is Rental Income Tax in Ireland 2025
In simple words, when you rent out a house or apartment, the money you get from the tenant is called rental income. In Ireland, this rental income is treated like regular income, so you have to pay tax on it. This means you give some of that money to the government.
Any rental income you make from it, you must declare it to the Revenue Commissioners. How much tax you will pay will depend on your income and your personal situation, such as whether you’re married or single.
What Counts as Rental Income?
Rental income includes:
- The money you receive from renting out a house, apartment, or flat.
- Payments you get from letting companies put signs or transmitters, like for mobile signals on your property.
- Money from granting people permission to use your land, for instance, for walking, fishing or shooting.
Now that you know what is rental income tax, let me tell you how to avoid rental income tax in 2025.
How to Avoid Rental Income Tax in Ireland Legally
In 2025, Ireland offers a number of tax reliefs and exemptions to landlords. Here are four main strategies that can help you lower or avoid taxes on your rental income.
1. Residential Premises Rental Income Relief (RPRIR)
In recent years, the Irish government has introduced a new relief called Residential Premises Rental Income Relief. It’s available to landlords who keep their properties in the rental market and meet certain conditions. To qualify,
- The property must be a residential premises.
- The landlord has to be an individual, not a company.
- The property must be let under a qualifying tenancy.
How Does It Work:
If you rent out a house or flat, you can reduce your tax by 20% of the profit you make from renting it. But, in 2025, the relief only works up to €800. You won’t be able to reduce your tax by more than €800.
2. Mortgage Interest Relief
If you have a mortgage on your rental property, you’ll be able to claim mortgage interest relief. To qualify,
- The mortgage has to be used to buy, build or fix up the rental property.
- The property needs to be registered with the Residential Tenancies Board (RTB) while it’s being rented out.
- Your property must be rented out during the period you claim.
How Does It Work:
You can deduct 100% of the mortgage interest you paid during the year from your rental income. It means you only pay tax on what’s left after subtracting that interest. There’s no maximum limit on this relief in 2025.
3. Rent-A-Room Scheme
If you rent out a room in your own home, you can qualify for rent-a-room scheme. But there are still some conditions, such as
- The room must be in your main house.
- The income must be below the €14,000 threshold.
- The room must be used for residential tenancies, not short-term guest arrangements like Airbnb.
How Does It Work:
You can earn up to €14,000 without paying any tax. But if you earn more than €14,000, the entire amount becomes taxable.
4. Pre-Letting Expenses
If you have a house or apartment that’s empty right now, but you’re planning to rent it out soon, you can claim some tax relief on the money you spend getting it ready. To qualify for it,
- The property must have been empty for at least 6 months before you rent it out.
- You can only claim tax relief on the money you spent in the 12 months before the first tenant moves in.
- You have to rent it to someone to live in, not for a business or some kind of short-term holiday.
How Does It Work:
You can claim up to €10,000 per property. But if you stop renting the property as a home within four years after the first tenant moves in, you have to pay back the tax relief that you claimed.
How to Declare Your Rental Income In Ireland 2025
Just knowing how to avoid rental income tax isn’t enough. You have to declare it to the Revenue office. It helps you stay legal and avoid any fines.
How you declare your rental income depends on how much profit you make after paying expenses.
-
If Your Net Rental Income is Less Than €5,000:
If your rental income, after expenses, is under €5,000 for the year, you can declare it easily through Revenue’s myAccount service.
Just log in to your myAccount, go to ‘Review your tax’, and complete your Income Tax Return. You can do it entirely online.
-
If Your Net Rental Income is Over €5,000:
If your rental income after costs is more than €5,000, you’ll need to register for self-assessment. It means you have to declare your income through the Revenue Online Service (ROS) by completing a Form 11.
-
Corporation Tax:
If you rent out your property through a company, you have to include your rental income in your Corporation Tax Return (Form CT1). You can also do it online through ROS.
Remember to keep all your bills and records of income and expenses safe and organized. This way, you can instantly prove your numbers if needed. It also makes filling out your tax return much easier.
FAQ
- How to avoid rental income tax in Ireland in 2025?
You can reduce your tax by using the RPRIR, Rent-A-Room Scheme or any other reliefs we mentioned above.
- Is foreign rental income taxable in Ireland?
Yes, if you’re an Irish resident, you have to pay tax on foreign rental income, even if you don’t bring the money into Ireland
- Is Airbnb income taxable in Ireland?
Yes, Airbnb income is considered taxable, often as trading income. You have to declare to the Irish Revenue.
Conclusion
Managing your rental income tax in Ireland doesn’t have to be so hard. In 2025, that’s easier than ever. All you need to do is understand how to avoid rental income tax properly.
You can easily pay less tax by using government reliefs such as the rent-a-room scheme or through claiming expenses such as mortgage interest. Just remember to declare your rental income correctly, to avoid penalties, and to keep good records.
Consult a tax professional to ensure you’re taking advantage of available opportunities and meeting with all the legal requirements.