Tax-efficient investment in Irish real estate

Tax-efficient investment in Irish property - Crowe Ireland

The Irish rental market has changed considerably over the last number of years, with lack of supply becoming a critical problem.

While there has been some improvement in supply of new stock to the market in recent months, product type, affordability and an increasing population are ensuring there is a thriving rental market. In August 2019, Daft.ie reported that there were only 2,700 properties to rent nationwide, the lowest figure on record for the country. The most important knock-on effect from this undersupply is, of course, a rise in cost. Rents are above the levels of 2008 and are still rising nationwide.

However, one person’s problem is another’s opportunity. With interest rates on bank deposits and investment returns on bonds remaining so low, investors have returned to the residential investment property market to earn a better return on their capital. With rising capital values and increasing rents across the country, investors who bought at the right time are now seeing a healthy return on their investment through capital appreciation and annual rental income.

One drawback for investors is the level of taxes to be paid on rental income in Ireland which can soon reduce any profits. Regardless of residency status, owners of Irish residential investment real estate are subject to Irish taxes. Residential investment property can be held personally, through a corporate entity or can be made via a real estate fund and each investment option comes with its own tax implications.

In our downloadable factsheet we outline the key tax rates facing investors as well as some worked examples to illustrate how the various tax rates are applied to each investment.

If you are considering investing in the Irish property market, we can help you to make property investments in a tax efficient manner. If you would like to learn more about finding the right investment structure to suit your requirements, contact a member of our specialist property and construction team.