Income tax on rent, worked example, in Ireland

Non-resident couple´s rental income1
Annual Rental Income2		1,500	6,000	12,000
Annual Rental Income		18,000	72,000	144,000
Less Expenses3	20%	(3,600)	(14,400)	(28,800)
Less Depreciation4		(5,357)	(16,071)	(35,573)
= Taxable Income		9,043	41,529	79,627
Income Tax
Up to €67,000	Unlock	Unlock	Unlock	Unlock
Over €67,000	Unlock			Unlock
Annual Income Tax Due		Unlock	Unlock	Unlock
Additional Tax
Health Levy	Unlock	Unlock	Unlock	Unlock
Annual Income Tax Due		Unlock	Unlock	Unlock
Deductions
Withholding Tax	Unlock	Unlock	Unlock	Unlock
Net Annual Tax Due		(€1,791)	(€6,094)	(€9,177)
Tax Due as % of Gross Income		Unlock	Unlock	Unlock
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Notes

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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 23% 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.