Revenue Note for Guidance

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Revenue Note for Guidance

222A Exemption of certain profits or gains arising from cost rental properties

Summary

Section 222A TCA provides a Corporation Tax exemption for rental income arising from dwellings designated as ‘Cost Rental’ under Part 3 of the Affordable Housing Act 2021. Details of all such profits or gains, losses, reliefs must be included in the Corporation Tax return and delivered to the Revenue Commissioners. The normal rules relating to the keeping of records and making those records available for inspection by Revenue also apply. In addition, the qualifying provider must submit details of the number of qualifying cost rental dwellings held by the company and the total amount of profit or gains that would be subject to Corporation Tax if the exemption did not apply.

The Minister for Housing, Heritage and Local Government must notify the Revenue Commissioners in writing where a designated cost rental dwelling is no longer within the scheme.

Details

Definitions

(1) Subsection (1) sets out a number of definitions for the purposes of the section. These include a definition of “cost rental dwelling”, “cost rental revocation”, “Minister”, “qualifying cost rental dwelling”, “qualifying provider” and “relevant profits or gains”.

“Act of 2021” means the Affordable Housing Act 2021;

“cost rental dwelling” has the same meaning as it has in Part 3 of the Act of 2021;

“cost rental revocation” has the same meaning as it has in Part 3 of the Act of 2021;

“Minister” means the Minister for Housing, Local Government and Heritage;

“qualifying cost rental dwelling” means a cost rental dwelling that is first designated as such by the Minister on or after 8 October 2025;

“qualifying provider” means a person chargeable in respect of the relevant profits or gains from a qualifying cost rental dwelling;

“relevant profits or gains” means the profits or gains, computed as provided for in section 97(1), arising from any rent and receipts from a qualifying cost rental dwelling.

(2) Subsection (2) provides that relevant profits or gains and deficiencies arising to a qualifying provider from qualifying cost rental dwellings shall be disregarded for all purposes of the Corporation Tax Acts. Any reliefs under Chapter 8 of Part 4 (section 97(2), 97A TCA or section 97B TCA) or any capital allowance that a qualifying provider could claim in respect of a qualifying cost rental dwelling shall also be disregarded for all purposes of the Corporation Tax Acts.

(3) Subsection (3) The provisions of the Corporation Tax Acts relating to the making of a return (Chapter 3 of Part 41A) by a chargeable person (Part 41A) apply:

(3)(a) paragraph (a) as if a qualifying provider in receipt of relevant profits or gains in any accounting period were a chargeable person (so the qualifying provider is obliged to submit a return)

(3)(b) paragraph (b) as if a notice issued to a qualifying provider under section 959N (exemption from need to submit a return) had not been issued (so that exemption does not apply), and

(3)(c) paragraph (c) to oblige qualifier provider in receipt of income from relevant profits or gains to keep records as if the income was chargeable to tax.

(3)(d) paragraph (d) the following information shall be provided by a qualifying provider for a chargeable period –

  1. The number of qualifying cost rental dwellings in which the qualifying provider is in receipt of rent,
  2. The total amount of rent received from the dwellings,
  3. The profit or gains that would have been subject to corporation tax if subsection (2) did not apply

(4) Profits or gains, losses reliefs and capital allowances are to be computed in accordance with the Corporation Tax Acts, ignoring the exemption under subsection (2).

(5) Where the Minister issues a cost rental revocation:

(5)(a) paragraph (a) the Minister shall notify the Revenue Commissioners in writing of the following:

  1. that a cost rental revocation has been issued in respect of the qualifying cost rental dwelling concerned;
  2. the address of the dwelling referred to in subparagraph (i);
  3. the date on which the cost rental revocation was sealed by the Minister,

(5)(b) paragraph (b) With effect from the date in which a property is no longer a qualifying cost rental dwelling , the profits or gains, losses reliefs and capital allowances are to be computed in accordance with the Corporation Tax Acts,

(5)(c) paragraph (c) Any capital allowances which could have been granted under Part 9 are deemed to have been granted. In other words, there is a notional writing down of capital expenditure in respect of which wear and tear allowances would, but for the relief under this section, have been granted.

Relevant Date: Finance Act 2025