Tax Obligations for Non Residents!

30 April 2018




Do you own a property in Ireland that you’re renting out but you don’t live in the country? There’s a few tax obligations that you need to be aware of, but also, there’s some tax deductions you need to be taking advantage of!

So, what exactly is a non-resident landlord?

You are classed as a non-resident landlord if you rent a property in Ireland but you reside in Northern Ireland or another country. Any money you make from the renting of your Irish property, comes under Irish taxation law and must be taxed the same as if you were a resident.


How exactly do you pay your tax to the Revenue Commissioners?


It works slightly differently than if you were a resident of Ireland. One method is when the tenants of your property actually withhold the income tax and pay it to the nearest tax office in their location on your behalf.

At the end of the tax year, the tenant then fills out a Form R185 and gives this to the landlord as a record of the tax paid. This may seem a quite roundabout way of organising your tax affairs but it is a lot cleaner than trying to pay money to the Revenue Commissioners from overseas.

But, what if you don’t want to put the responsibility of paying your tax on your tenants? Your tenants may not be willing to do this for you, or you may not trust your tenants to pay the correct amount. There could be a number of reasons why you wouldn’t want to go down that route, but luckily there is an alternative


Using a Collection Agency

A tax collection agent is an Irish resident who collects and files income tax on your behalf. The handiness with this option is that they are provided with a second PPS number to be used exclusively when dealing with your income tax. They can be a company, individual or even a family member, trusted friend or tax advisor.

This is normally the preferred method of dealing with income tax, as it takes the burden away from the tenants. Then, you, the landlord is able to receive your full monthly rent and can sort out your own taxes and know that you are completely compliant with local taxation laws. Even if you use a collection agent it would be advisable to use the help of a tax consultant to ensure you are fully tax compliant and have claimed all the deductions you are entitled to so that your tax bill is kept to a minimum. They can also advise you on your PRSI and USC position and their fees for completing the rental computations are tax deductible.


But it’s not all doom and gloom!


Did you know that, even though, you may be a non-resident of Ireland, you are still entitled to the same deductions as resident landlords!


PRTB – Private Residential Tenancies Board


You will have to register with the PRTB at €90 per tenancy. You are entitled to claim this as a deductible expense for tax relief though!


Mortgage Interest Relief

If your tenants are registered with the PRTB you are entitled to claim tax relief of 80% on the mortgage interest of your rental property from 1 January 2017. For certain tenancies the interest deduction is 100% where the property is let out for 3 years for social housing use.


Repairs and Maintenance

If you need to carry out repairs or maintenance to your rental property you can claim these back as expenses in your tax return. Included in the repairs or maintenance is the cost of hiring a third party for labour, which is extremely helpful in the case of non-resident landlords who cannot do the repairs or maintenance themselves.


Management Fees

Are you paying a management company to collect rent and overall manage your property? Did you know you that these fees as tax deductible? If you didn’t, you need to get that sorted! Hiring an agent or company to manage your property is something a lot of non-resident landlords opt for, due to peace of mind, but so many of them don’t know that these fees are completely tax deductible!


Insurance Premiums

Have you purchased insurance to cover and protect your rental property? You guessed it, your insurance premium on the rental property is deductible in your tax returns!