Finance (No. 2) Bill 2023 - Property

Rented Residential Relief

As announced on Budget Day, the exemption will be in the form of an income tax credit at 20% of residential rental profits on properties located in Ireland, providing for an annual tax credit of up to:

  • €600 for 2024
  • €800 for 2025
  • €1,000 for 2026 and 2027

Where the property is jointly owned, the relief is dividend in proportion to the rental income to which each owner is entitled.

To avail of the relief the following conditions must be met:

  • The premises must be owned on 31 December of the year and occupied by a tenant/registered with the Residential Tenancies Board (‘RTB’) or let to a public authority or actively marketed for rent.
  • The landlord must be LPT compliant and hold a valid Tax Clearance Cert

The relief will not apply if the premises is occupied by certain tenants who are connected to the individual or are closely related to the individual/their spouse.

Relief is clawed back if any of the qualifying premises are, within 4 years from the start of the first year in which relief was claimed, disposed of or otherwise removed from the rental market.

Rent payable to non-resident landlords

This is a technical amendment to clarify that where a tenant of a non-resident landlord pays rent to a collection agent the tenant will not be required to deduct and remit withholding tax to Revenue.

Help to Buy scheme

The scheme is extended until 31 December 2025.

Mortgage Interest Relief

As announced on Budget Day, the Bill introduces a temporary one year tax credit for taxpayers with an outstanding mortgage balance on their principal private residence (‘PPR’) of between €80,000 and €500,000 as of 31 December 2022.

Mortgage interest relief will be available at the standard rate of income tax of 20% for 2023 on the increase in interest paid in 2023 over interest paid in 2022. The relief will be capped at €6,250 of interest per residence, which equates to a maximum tax credit of €1,250.

To claim the relief the taxpayer must:

  • Be LPT compliant and
  • File a tax return

Tax Deduction for retrofitting expenditure

The Bill provides a deduction for certain retrofitting expenditure for landlords of certain properties which were previously subject to rent controls.

Capital Gains Tax (‘CGT’) relief on disposal of certain land and buildings

This measure refers to the existing CGT relief that applies to certain property acquired between 7 December 2011 and 31 December 2014. The relief only applies where the property was purchased for full market value or for not less than 75% of market value, if purchased from a relative. The Bill clarifies that provisions which otherwise deem market value to apply to certain transactions do not apply for the purposes of this relief.

Return to Finance (No.2) Bill 2023 Commentary

Team Members

Jackie Masterson

Head of Tax, Tax Partner

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