Tax on property income in Ireland
Effective Tax Rate on Rental Income |
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Monthly Income | €1,500 | €6,000 | €12,000 |
Tax Rate | 10.05% | 11.54% | 12.52% |
Click here to see a worked example | |||
Source: |
Disclaimer |
INDIVIDUAL TAXATION
Nonresidents are taxed on their income from Irish sources. Married couples may elect to be taxed separately or jointly.
The tax year in Ireland had been aligned to the calendar year as of January 2002.
INCOME TAX
Nonresidents are liable to pay taxes on their Irish-sourced income. Taxable income is generally an aggregate of all kinds of income.
The rates that apply to residents may not apply to nonresidents, unless all of the taxpayer´s income is subject to Irish income tax. Allowances, deductions and credits available to residents are not available to nonresidents unless certain conditions are met.
RENTAL INCOME
Rental income is taxed at 20%, withheld by the tenant. The taxpayer has the option to file a return and claim relief for income-generating expenses. Allowable deductions include ground rent, rates, maintenance costs, general repairs, insurance, management fees, service charges, advertising, accounting fees, depreciation (wear and tear), building expenditures, and interest.
Stamp Duty on Property Leases
Stamp duty rates on property leases range from 1% to 12%, which is levied on the average annual rent reserved by lease. The applicable rate depends on the length of the lease.
STAMP DUTY ON PROPERTY LEASE |
|
LEASE PERIOD | |
Up to 35 years or indefinite | 1% of average annual rent |
36 years to 100 years | 6% of average annual rent |
Over 100 years | 12% of average annual rent |
Source: Global Property Guide |
CAPITAL GAINS
Nonresidents are liable to pay capital gains tax for gains realized from the sale of real estate property in Ireland. Capital gains tax is imposed at a flat rate of 33%, effective as of 06 December 2012.. Taxable capital gains are generally computed as selling price less acquisition costs, adjusted for inflation, and improvement costs.
Nonresidents earning capital gains exceeding €500,000 from the sale of Irish property are liable to pay withholding tax at the rate of 15%, which is levied on the selling price/fair market value of the property. This tax is then credited against the nonresident´s capital gains tax liability.
Stamp Duty on Sales of Residential Properties
Stamp duties are levied on sales of residential properties at progressive rates.
STAMP DUTY ON SALES OF RESIDENTIAL PROPERTIES |
|
TAX BASE, € | |
Up to €1 million | |
Over €1 million | |
Source: Global Property Guide |
PROPERTY TAXATION
Local Property Tax (LPT)
Local property tax is levied at different rates, depending on the value of the property.
For properties that are valued at least €1,000,000, local property tax is levied at a flat rate of 0.18% on the first €1,000,000, and at a flat rate of 0.25% on the property value exceeding €1,000,000.
LOCAL PROPERTY TAX FOR PROPERTIES WORTH AT LEAST €1,000,000 |
|
PEROPERTY VALUE , € | |
Up to €1,000,000 | |
Over €1,000,000 | |
Source: Global Property Guide |
For properties that are valued €50,000 up to €1,000,000, a different local property tax rate system applies.
CORPORATE TAXATION
INCOME TAX
Income earned by companies is subject to corporate income tax at varying rates depending on income classification: 12.5% on trading income and 25% on non-trading income.
CAPITAL GAINS TAX
Capital gains tax earned by companies is subject to capital gains tax at 33%.
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