Tax on rental income in Ireland: what you will pay, with 3 worked examples

On a EUR 21,000 a year apartment, a landlord who also earns a EUR 60,000 salary will hand about EUR 5,500 of it to Revenue for 2026. A landlord with no other income, on a slightly bigger rental profit, pays about EUR 1,000. Same tax system, very different bills.

The difference is not a special landlord rate. There is none. Rental profit sits on top of whatever else you earn, and it is taxed at the rate your income has already reached. Then USC and PRSI come on top.

This guide sets out the rules for the 2026 tax year, works through 3 real-shaped examples to the euro, and covers what Budget 2027 proposes for next year. Every figure comes from Revenue or the Department of Finance, listed at the end.

The short answer

You pay income tax, USC and PRSI on your rental profit, which is the rent you received less allowable expenses. Revenue’s wording is that net rental income “is added to your other income” and taxed according to your total income. For 2026 a single person pays 20% on the first EUR 44,000 of total income and 40% on the rest.

USC for 2026 is 0.5% on the first EUR 12,012, 2% up to EUR 28,700, 3% up to EUR 70,044 and 8% above that. If your total income is EUR 13,000 or less you pay no USC at all. Above that, it applies to all of it. For a landlord, USC is worked out on the rental profit before capital allowances, so wear and tear on furniture cuts your income tax and PRSI but not your USC.

PRSI is charged on rental income too. The rate rose from 4.2% to 4.35% on 1 October 2026, so for 2026 income returned through self-assessment the Department of Social Protection sets a blended rate of 4.2375%. If rent is your only income you pay Class S PRSI once that income, before capital allowances, reaches EUR 5,000, with a minimum of EUR 650.

Against all that, the Residential Premises Rental Income Relief takes up to EUR 1,000 off your income tax for 2026. It is the lowest of EUR 1,000, 20% of the profit from qualifying property, or 20% of your total rental profit. It does not reduce USC or PRSI.

What you can deduct, and what you cannot

Revenue’s list of allowable expenses includes:

• Mortgage interest on a loan used to buy, improve or repair the property, at 100%, as long as every tenancy in it is registered with the RTB.
• Insurance, repairs, maintenance such as cleaning and painting, and services you pay for that the tenant does not repay.
• Management fees, which covers a letting agent managing the property for you.
• The cost of registering with the RTB.
• Accountancy fees for preparing the rent account. Fees for other work, such as your wider tax affairs, are not allowed.
• Wear and tear on furniture and fittings in a furnished letting: 12.5% of the cost a year for 8 years. A EUR 1,000 sofa gives EUR 125 a year.
• Pre-letting expenses of up to EUR 10,000 on a property vacant for at least 6 months, spent in the 12 months before letting and before 31 December 2027.

You cannot deduct Local Property Tax, capital improvements such as an extension, the value of your own labour, or interest from the date you bought the property until it was first let. Repairs are allowed. Improvements are not, and the line between them is where most queries come from.

If a tenant never paid and you cannot recover it, Revenue will adjust your taxable income for rent you can show was unrecoverable. Our guide to chasing rent arrears covers the records that prove it.

Example 1: a PAYE employee with one apartment

Sinéad is single and earns a salary of EUR 60,000, so her salary already reaches the 40% band and the 3% USC band. She lets one apartment for EUR 1,750 a month, EUR 21,000 for 2026, and the tenancy is registered with the RTB.

Her expenses for the year are EUR 4,800 of mortgage interest, EUR 450 of insurance, EUR 1,200 of repairs, EUR 300 to her accountant for the rent account, and EUR 1,000 of wear and tear on EUR 8,000 of furniture. That is EUR 7,750, leaving a rental profit of EUR 13,250.

Sinéad, 2026	EUR
Income tax at 40% on 13,250	5,300.00
Less landlord relief (lowest of 1,000 or 20% of profit)	-1,000.00
USC on 14,250, the profit before wear and tear: 10,044 at 3% to the 70,044 line, 4,206 at 8% above it	637.80
PRSI at 4.2375%	561.47
Total on the rental profit	5,499.27

That is 41.5% of her profit and 26.2% of the gross rent. Because her rental profit is over EUR 5,000, she is a chargeable person and files a Form 11, not a Form 12.

Example 2: a landlord with no other income

Declan is single, 50, and lives on the rent from a house he owns outright. It lets for EUR 1,600 a month, EUR 19,200 a year, and after EUR 3,200 of expenses his rental profit is EUR 16,000.

Income tax at 20% on EUR 16,000 is EUR 3,200. Because he has no other income, his EUR 2,000 personal tax credit is set against it, leaving EUR 1,200. The landlord relief then takes off EUR 1,000, so he pays EUR 200 of income tax. The employee credit is not available to him, and Revenue’s earned income credit cannot be used against rental income.

His total income is over EUR 13,000, so USC applies to all of it: EUR 60.06 on the first EUR 12,012 and EUR 79.76 on the rest, EUR 139.82 in total. PRSI is Class S at 4.2375%, which is EUR 678.00, just above the EUR 650 minimum.

His total for 2026 is EUR 1,017.82, about 6.4% of his profit. PRSI is the largest part of his bill, which surprises most landlords in his position.

Example 3: the same apartment, never registered with the RTB

Go back to Sinéad, but this time the tenancy was never registered with the RTB. Revenue’s rule is blunt: “If all the tenancies in a dwelling are not registered for a particular year, all interest relief in respect of that dwelling will be lost for the year.” There is no apportioning by months.

Her EUR 4,800 of interest is added back, so her profit becomes EUR 18,050. The landlord relief needs the tenancy to be registered on 31 December, so this apartment drops out of it and the EUR 1,000 goes as well. Income tax is now EUR 7,220, USC EUR 1,021.80 and PRSI EUR 764.87, a total of EUR 9,006.67.

The missed registration costs her EUR 3,507.40 for the year. Revenue treats the interest test as met if the tenancy is registered by the return filing date, and interest refused for an earlier year can be restored through late registration within the usual 4-year limit. The landlord relief is different: it looks at whether the tenancy was registered on 31 December, so registering later may not bring that EUR 1,000 back. Registering within the year protects both.

Which return, and when

If you are a PAYE employee and your net rental income is EUR 5,000 or less, and your gross rent is not over EUR 30,000, you can declare it on a Form 12. Revenue then adjusts your tax credits and rate band to collect the tax through your salary.

Above either limit, you register for self-assessment and file a Form 11. Once you are a chargeable person you stay one for as long as the rental continues, even in a year when the profit falls. The 2026 return is due by 31 October 2027, with a later date for filing and paying online that Revenue announces each year. For 2025 returns it was 18 November 2026.

The same deadline is when you pay preliminary tax for 2027. In your first year of self-assessment, choosing 100% of the previous year’s liability usually means paying nothing, because the previous year’s liability is nil. You do not file a rental computation with the return, but Revenue expects one for each property to be kept for 6 years.

What Budget 2027 proposes

Budget 2027 was announced on 6 October 2026 and the Finance (No. 2) Bill 2026 was published on 19 October. It has not been enacted yet, so treat these as proposals:

• The 20% band rises by EUR 2,500, to EUR 46,500 for a single person.
• The personal tax credit rises by EUR 125, to EUR 2,125.
• The 2% USC band is extended to EUR 30,300.
• Rent a room relief rises from EUR 14,000 to EUR 16,000.

PRSI is not a Budget measure, but the rate rises again to 4.5% on 1 October 2027, so the rate for 2027 income returned through self-assessment works out at 4.3875%, the figure the Department of Finance uses in its Budget 2027 tables. Nothing changes the landlord relief, which stays at up to EUR 1,000 for 2027, its last legislated year. Pre-letting expenses still need to be spent before 31 December 2027. Our Budget 2027 guide for landlords covers the CGT cut and the clawback on the landlord relief, which matters if you are thinking of selling a rented property.

For Sinéad, at 40% on a salary well above the band, the 2027 band change barely touches her rental slice. For Declan it is worth more: a bigger personal credit against tax he pays at 20%. You can run both years side by side in the calculator. All 3 examples above give the same answer in it, to the euro.

How we handle this in Rentalize

Most of what decides your tax bill is record keeping: rent received against rent due, expenses by property, and proof that every tenancy is registered with the RTB. Rentalize Core keeps all three against the tenancy. Expense tracking by property and unit, and Irish compliance and RTB reporting, are on every plan. The reporting page lists what is included.

If you are a landlord with more than a handful of properties, or an agent managing them for owners, the RTB registration status on every tenancy is the line that protects the interest deduction. That is the one worth checking before 31 October.

If you manage tenancies for other owners, you can book a 20-minute walkthrough or check pricing.

Questions

How much tax do you pay on rental income in Ireland?

Rental profit is added to your other income and taxed at your marginal rate, 20% or 40%, plus USC and PRSI. For 2026, PRSI on self-assessed rental income is 4.2375%. A PAYE employee in the 40% band pays about 47% to 52% of each extra euro of profit, depending on their USC band, before the landlord relief of up to EUR 1,000.

How much rental income is tax free in Ireland?

None, for a separate property you let. All Irish rental income must be declared. Rent a room relief exempts up to EUR 14,000 a year for 2026, but only for a room in your own home, and Budget 2027 proposes raising it to EUR 16,000 from 2027.

Do you pay PRSI on rental income in Ireland?

Yes. If rent is your only income you pay Class S PRSI once that income, before capital allowances, reaches EUR 5,000, with a minimum payment of EUR 650. Employees with rental income pay at Class K. The rate was 4.2% until 30 September 2026 and 4.35% from 1 October 2026.

Is mortgage interest deductible on a rental property in Ireland?

Yes, 100% of interest on a loan used to buy, improve or repair the property, but only if every tenancy in it is registered with the RTB. If one is not, all interest relief for that property is lost for the year. Registering by the return filing date keeps the relief.

Do I need to file a Form 11 for rental income?

Yes, if your net rental income is over EUR 5,000 or your gross rent is over EUR 30,000. Below both limits, a PAYE employee can declare it on a Form 12 and have the tax collected through their salary.

Sources: Revenue, Irish rental income pages and Tax and Duty Manuals 04-08-01, 04-08-04, 04-08-06, 04-08-08, 04-08-10, 04-08-11, 04-08-12, 15-01-44, 15-03-04, 18D-00-01 and 42-04-13; Revenue tax rates and USC charts for 2026; Department of Social Protection, PRSI Contribution Rates and User Guide SW14 (January 2026); Department of Finance, Budget 2027 Tax Policy Changes book and Finance (No. 2) Bill 2026 Explanatory Memorandum. The people in the examples are illustrations. This is general information, not tax advice.

Photo: Dublin Castle by William Murphy, licensed CC BY-SA 2.0, via Wikimedia Commons.