Revenue and Tax
Rental income is computed on the basis of the gross amount of rents receivable. A surplus (profit) or a deficiency (loss) is calculated separately for each rental source (see Part 4.8.2 (PDF, 23 KB) and Part 4.8.14 (PDF, 133 KB) of the Income Tax, Capital Gains Tax and Corporation Tax Manual). The rental income chargeable to tax is the aggregate of the surpluses as reduced by the aggregate of the deficiencies. Rental losses occur when the deficiencies exceed the surpluses.
Rental income from property situated in the Republic of Ireland (the State) is chargeable to tax under the provisions of Case V Schedule D Taxes Consolidation Act (TCA) 1997.
Rental income from property situated outside the State is chargeable to tax under the provisions of Case III Schedule D TCA 1997.
In general, the same rules apply for computing income for Case V (Irish rents) and Case III (foreign rents) purposes. However, please note that deficiencies from one source cannot be offset against surpluses from the other. Nor can Irish rental losses be set against foreign rental income or vice versa.
This guide addresses many of the issues that arise in relation to the taxation of rental income. Hopefully it will assist you in understanding those issues and in computing your income or losses for inclusion in your annual return of income.
The legislation concerning rental income is found mainly in Part 4, Chapter 8 TCA 1997. This legislation and related guidance notes are available in the Tax Practitioners section of the Revenue website, www.revenue.ie.