The Minister for Finance, Paschal Donohoe, has announced a new tax deduction for small-scale landlords who undertake retrofitting works while the tenant remains in situ. The measure will provide for a tax deduction of up to €10,000 per rented residential property against Case V rental income, for certain retrofitting expenses, for a maximum of two rental properties.
The expenses that qualify for deduction will be those for which the landlord will have received a home energy grant from the Sustainable Energy Authority of Ireland (SEAI). As such, the tax deduction is in addition to the SEAI grants and is conditional on the landlord having claimed an SEAI grant for the same retrofitting works.
Retrofitting works carried out and certified by the SEAI in year 1 can be claimed against Case V rental income in year 2. The scheme will run for 3 years. The property must remain as a rental property for a period of two years after the work has been carried out. The landlord must also be tax compliant and registered with the Residential Tenancies Board.
Further details will be set out in the Finance Bill in due course.
Commenting, Minister Donohoe said:
“I am pleased to announce a new tax incentive for landlords who undertake retrofitting works while the tenant remains in situ. Landlords play an important role in the private rental sector and this measure is aimed at attracting and retaining small-scale landlords in that market. This new tax deduction is in addition to the SEAI’s grants and the combination of both measures offers substantial support to landlords to retrofit their rental properties. This will also assist in improving the quality and comfort of homes in the private rental sector and as such will be of benefit to individuals and families who are renting.”