Revenue Note for Guidance

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Revenue Note for Guidance

480C Residential Premises Rental Income Relief

Summary

Section 480C provides income tax relief to individual landlords of residential rental property. The relief is known as the “Residential Premises Rental Income Relief”.

Details

Definitions

(1) A “person chargeable” is defined as an individual who is a person chargeable within the meaning of section 96. The definition in section 96 is amended for the purposes of this section to restrict it to individuals only.

A “qualifying premises”, means a residential premises situated in the State that is, on 31 December in a year of assessment, owned by the landlord and occupied by a tenant

  1. under a tenancy registered with the Residential Tenancies Board,
  2. and is a property to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies, or
  3. and is let to a public authority.

A property that is not currently being rented may nevertheless come within the definition of a “qualifying premises” where it is being actively marketed for rent as a residential property.

“relevant amount” is defined as the amount of profits or gains from all qualifying premises owned by the landlord and on which the landlord is charged to tax under Case V of Schedule D, after capital allowances and losses have been deducted.

“total Case V income” means the total amount of Case V income on which the person chargeable is assessed to income tax after deducting any capital allowance and rental losses carried forward. It is the overall Case V position of the person chargeable.

The terms “rent” and “rented residential premises” both take their meaning from section 96.

(2) A landlord of residential rental property who is eligible for residential premises rental income relief is entitled to a credit of the lowest of —

For 2024—

  • €600,
  • 20% of the landlord’s case V profits from qualifying premises, or
  • 20% of the landlord’s overall case V income

For 2025—

  • €800
  • 20% of the landlord’s case V profits from qualifying premises, or
  • 20% of the landlord’s overall case V income

For 2026 and 2027—

  • €1000,
  • 20% of the landlord’s case V profits from qualifying premises, or
    20% of the landlord’s overall case V income.

(3) The tax credit will not be available where any of the landlord’s residential premises is occupied by a tenant who is—

  • connected to the landlord by virtue of section 10, or
  • an uncle, aunt, niece or nephew of the landlord or of a spouse or civil partner of the landlord.

(4) This subsection sets out the circumstances that will give rise to a clawback of relief claimed. These are, where during the 4-year period beginning with the first year in which a credit is claimed, the landlord —

  1. ceases to be the owner of any of their qualifying premises. This includes where a landlord disposes of any of the qualifying premises or otherwise takes any of these properties out of the rental market. This may include where a landlord changes the use to let the property as a short-term letting. Income from short-term lettings is taxable under Case I or Case IV (depending on the circumstances) rather than Case V and therefore is not eligible for a credit under this section.
  2. rents any of their qualifying premises to a connected party (within the meaning of section 10) or to certain relatives, including an uncle, aunt, niece or nephew of the landlord or of the landlord’s spouse or civil partner.

(4A) A clawback of relief claimed will not arise where a landlord dies during a relevant year of assessment.

(5) Where an event resulting in a clawback of relief claimed occurs, a Revenue officer will make or amend an assessment to withdraw the credit claimed by the landlord. Any additional tax due on foot of this assessment will be due and payable on the same date as the tax was due for the year of assessment in which the event triggering the clawback took place.

(6) The tax credit will not be available unless the landlord has, on 31st December in the relevant year of assessment, complied with their LPT obligations in respect of all qualifying premises and holds a valid Tax Clearance Certificate.

(7) Where a qualifying premises is owned by more than one person the credit will be divided between the owners in proportion to the amount of rental income they are each entitled to receive in respect of that property.

(8) Where a landlord co-owns or jointly owns one qualifying premises but also owns another qualifying premises in their sole name, that landlord will be entitled to a full credit under subsection (2).

(9) Where a landlord co-owns or jointly owns a number of qualifying premises, that landlord will be entitled to a credit in respect of the property in which that landlord has the largest ownership share. For example, a landlord co-owns three properties - in the first property, the landlord has a 50% ownership, 30% in the second property and 70% in the third. The landlord can claim 70% of the credit under this section as this is the largest percentage ownership that landlord has in any one property.

(10) The tax credit is available for the years of assessment 2024, 2025, 2026 and 2027.

Relevant Date: Finance Act 2024