We have outlined the tax position for an expat who owns a rental property in Ireland but is no longer Resident in Ireland. We will examine the tax obligations for a non-Resident landlord and outline of the changes brought in on 1 July 2023 in relation to the new Non-Resident Landlord Withholding Tax (NLWT) system.
We have outlined when someone is chargeable to Irish tax, what kind of information you need in order to go about filing your Irish income tax return and how to pay your Income tax correctly.
If you actively rent out a property in Ireland but reside in a different country including Northern Ireland, you will be classified as a non-resident landlord. Income from the renting of property or from another source qualifies as rental income in Ireland and must be declared to Revenue. If the property is located in Ireland, it will generally be taxable in Ireland first with a credit in your country of residence.
Landlords who engage collection agents should ensure that their collection agents have the necessary information to engage with the new Non-Resident Landlord Withholding Tax (NLWT) system. A reliable collection agent can keep your taxes efficient and ensure compliance while reducing the stress of tax returns.
Under the NLWT system, collection agents must be in receipt of rent from tenants and withhold and remit 20% of the rent payments to Revenue, and submit this with a Rental Notification (RN) in the NLWT system.
As a non-resident landlord, your collection agent will need to submit an RN.
Collection agents who collect rent on behalf of a non-resident landlord and who wish to remain chargeable, must register with Revenue. To register as a collection agent, they must complete the Collection agent registration form.
Collection agents who collect rent on behalf of a non-resident landlord and who do not wish to be chargeable, must engage with the NLWT system. Collection agents who engage with the NLWT system do not need to register with Revenue.
Upon receiving a rental payment, the collection agent must submit an RN to Revenue and remit 20% of that rent payment to Revenue.
Under NLWT, an individual must submit an Income Tax Return (Form 11) or Corporation Tax Return (CT1) for all of your income. This includes your rental income.
If non-resident landlords engage a collection agent, the tenant will pay the rent directly to the collection agent. The tenant will then have no further role. If the tenant pays rent directly to the non-resident landlord, the tenant must engage with the Non-Resident Landlord Withholding Tax (NLWT) system.
The tenant can access the NLWT system in myAccount or in the Revenue Online Service (ROS). In this system, tenants can make Rental Notifications (RNs) when rent is paid to a non-resident landlord. As part of the RN, tenants withhold and remit 20% of the rent payment to Revenue. This withheld sum will be available to the non-resident landlord as a credit when they submit their annual return.
Where landlords do not engage collection agents, their tenant must make the RN and remit the 20% deduction directly to Revenue.
As a non-resident landlord, you must submit either an Income Tax Return (Form 11) or a Corporation Tax Return (CT1) under your TRN. Your return must contain details of all your income, not just your rental income.
In the NLWT system, the details in the RN will be pre-populated on your annual return. This includes your gross rental income and the credit withheld sum. You may wish to employ the services of a tax agent to file a return on your behalf.
If you are a non-resident landlord, you should file a single tax return (Form 11). Your return must:
If the above steps are taken, your collection agent does not need to file a return.
You will also receive credit for NLWT deducted by your tenant or collection agent during 2023.
We also recommend that you continue to pay your annual Local Property Tax in 2025 if you own a residential property on the 1st November 2024.
You also need to consider Capital Gains Tax but only if you have sold the property in 2024 or decide to sell it at a later date.
If you inherit a property in Ireland, it will probably be subject to Capital Acquisitions Tax in Ireland if the property is located here even if you are living abroad.
Can I still claim Tax Reliefs as a non-resident landlord?
You will still be entitled to the same tax reliefs in the form of rental expenses.
Some of the specific expenses that you may be able to claim as a non-resident landlord which can lower the amount of tax you owe to Revenue can include:
It is important that you keep all your receipts and submit them to your tax adviser with your Income Tax information.
Rental Income Tax Relief
A new relief is available for individual landlords of rented residential premises. The relief is known as Residential Premises Rental Income Relief (RPRIR).
The maximum amount of relief for each year is as follows:
The relief only applies to income tax and will be clawed back if you withdraw your rental property from the market.
It is essential to seek advice when unsure on your tax responsibilities and can ultimately help you to avoid costly errors and penalties. You should be entitled to the personal tax credit but we recommend that you talk to a tax adviser. You should always keep your records for a six year period.
Speak to an Irish tax specialist to ensure you are doing things correctly.
If you need help with your Irish tax returns, whether related to property, or other assets, you should seek qualified advice from an Irish tax specialist.
Having a rental property in Ireland while living abroad can provide opportunities as well as a regular cashflow and we suggest that you reach out to the experts to see how you can get the most beneficial outcome from a tax perspective. Always remember we are here to help!