Tax Benefits For Real Estate Investors In Ireland

Published on October 4, 2025 and written by Cyril Jarnias

Ireland has become a premier destination for international real estate investors in recent years. With its favorable tax system and dynamic property market, the country is attracting an increasing number of foreign investors seeking profitable opportunities. In this article, we will explore in detail the tax benefits available to real estate investors in Ireland, focusing on local taxation, international agreements, and comparisons with other countries.

Attractive Local Taxation for Real Estate Investors

Ireland offers a particularly advantageous tax framework for real estate investors, with several incentive measures aimed at stimulating investment in the sector:

Tax Rate on Rental Income

Rental income in Ireland is subject to income tax at the marginal rate of 40% for individuals. However, investors can benefit from significant tax deductions that substantially reduce the taxable base:

• Mortgage interest deduction: Interest paid on real estate loans is 100% deductible from rental income.
• Maintenance and repair expense deduction: All costs related to property maintenance and repairs are deductible.
• Depreciation: Investors can deduct up to 12.5% per year of the value of furniture and equipment provided with the rented property.

Partial Exemption on Real Estate Capital Gains

Ireland applies a 33% tax rate on real estate capital gains. However, investors can benefit from a partial exemption in certain cases:

• Long-term holding exemption: A 7% reduction per year is granted starting from the 7th year of ownership, potentially leading to full exemption after 20 years.
• Primary residence exemption: The sale of a primary residence is completely exempt from capital gains tax.

Tax Incentives for Renovation

The Irish government has implemented several tax incentive programs to encourage the renovation and rehabilitation of real estate properties:

• Living City Initiative: This program offers tax deductions of up to 10% per year for 10 years for the renovation of residential buildings in designated urban areas.
• Home Renovation Incentive: This measure allows homeowners to benefit from a 13.5% tax credit on renovation and energy improvement works, up to a maximum amount of €30,000.

These tax benefits make real estate investment in Ireland particularly attractive, allowing investors to maximize their rental returns and benefit from favorable taxation on long-term capital gains.

Favorable International Taxation: Double Taxation Agreements

Ireland has signed numerous double taxation agreements with countries worldwide, making it a preferred destination for international real estate investors. These agreements aim to prevent real estate income from being taxed twice, in the source country (Ireland) and in the investor’s country of residence.

An Extensive Network of Tax Agreements

Ireland has concluded double taxation agreements with over 70 countries, covering most major world economies. Among the countries involved are:

• United States
• United Kingdom
• France
• Germany
• Canada
• Australia
• China

These agreements allow foreign investors to benefit from favorable tax treatment on their Irish real estate income.

Key Principles of Double Taxation Agreements

The double taxation agreements concluded by Ireland are generally based on the following principles:

• Taxation in the source country: Real estate income is generally taxable in the country where the property is located (Ireland).
• Tax credit in the country of residence: The investor’s country of residence grants a tax credit corresponding to the tax paid in Ireland, thus avoiding double taxation.
• Reduced tax rates: Some agreements provide for reduced tax rates on real estate income for residents of signatory countries.

Benefits for International Investors

These double taxation agreements offer several benefits to international real estate investors in Ireland:

• Reduction of overall tax burden
• Simplification of administrative procedures
• Increased legal and tax security
• Ability to repatriate rental income to the country of residence without double taxation

Thanks to this extensive network of tax agreements, Ireland positions itself as a premier destination for international real estate investors, offering a stable and advantageous tax framework.

Local Property Tax: Moderate Property Taxation

In Ireland, the main property tax is the Local Property Tax (LPT), introduced in 2013 to replace the former residential property tax. This tax, relatively moderate compared to other European countries, constitutes an additional advantage for real estate investors.

Calculation of Local Property Tax

The LPT is calculated based on the estimated value of the real estate property:

• For properties valued under €1 million, the base rate is 0.18%.
• For the portion of the value exceeding €1 million, a rate of 0.25% applies.

Local authorities have the ability to adjust this base rate by +/- 15% according to the community’s funding needs.

Exemptions and Reductions

Certain categories of real estate properties may benefit from LPT exemptions or reductions:

• Social housing
• Newly built properties purchased between 2013 and 2021
• Properties affected by pyrite (a mineral that can cause structural damage)

Additionally, low-income individuals may benefit from a deferral of LPT payment.

Comparison with Other European Countries

Irish property taxation appears relatively advantageous compared to other European countries:

• France: Property tax can reach 1-3% of the property’s cadastral rental value.
• United Kingdom: Council Tax can represent up to 0.5% of the property value per year.
• Germany: Grundsteuer varies between 0.26% and 0.35% of the property value depending on the Länder.

The Irish LPT, with its base rate of 0.18%, therefore positions itself as one of the most competitive property taxes in Europe.

Impact on Investors

For real estate investors, the moderation of the LPT presents several advantages:

• Reduction in property holding costs
• Improved rental profitability
• Predictability of long-term tax charges

This advantageous property taxation contributes to strengthening the attractiveness of the Irish real estate market for both domestic and international investors.

Ireland vs Other Destinations: A Tax Haven for Real Estate?

To better understand Ireland’s tax attractiveness for real estate investors, it’s interesting to compare its tax regime with other popular destinations for international real estate investment.

Comparison of Tax Rates on Rental Income

• Ireland: Marginal rate of 40%, with numerous possible deductions
• France: Progressive rate up to 45%, with additional social charges
• United Kingdom: Progressive rate up to 45%
• Spain: Fixed rate of 24% for non-residents, progressive rate for residents
• Portugal: Fixed rate of 28% for non-residents, progressive rate for residents

Ireland positions itself favorably, particularly thanks to its numerous possibilities for tax deductions that significantly reduce the taxable base.

Comparison of Tax Rates on Real Estate Capital Gains

• Ireland: 33%, with possible partial exemption after 7 years of ownership
• France: 19% + social charges, with allowance for holding period
• United Kingdom: 18% to 28% depending on the taxpayer’s tax bracket
• Spain: 19% for non-residents
• Portugal: 28% for non-residents

Although the Irish rate may seem high at first glance, the partial exemption for long-term holding makes this regime very attractive for long-term investors.

Specific Advantages of Ireland

Several factors contribute to making Ireland a tax-advantaged destination for real estate investment:

• Absence of real estate wealth tax, unlike some countries like France
• Favorable tax regime for real estate holding companies
• Possibility to structure investments through real estate investment funds benefiting from advantageous tax treatment
• Political and economic stability, offering long-term visibility for investors

Limitations and Points to Consider

Despite its many advantages, Ireland is not strictly speaking a “tax haven” for real estate. Some points deserve investors’ attention:

• Irish taxation remains complex and often requires support from local experts
• Tax rules can evolve, particularly under international pressure to combat aggressive tax optimization
• The Irish real estate market is dynamic but can experience significant fluctuations

In conclusion, Ireland offers an overall advantageous tax framework for international real estate investors, positioning itself favorably compared to many other European destinations. However, as with any international investment, thorough analysis and professional support are essential to optimize your tax strategy and maximize returns.

Conclusion: Ireland, a Land of Opportunity for Savvy Real Estate Investors

Ireland undoubtedly positions itself as a premier destination for international real estate investors seeking an advantageous tax framework. With its attractive local taxation, extensive network of double taxation agreements, moderate property tax, and overall competitive tax regime, the country offers numerous opportunities to optimize real estate returns.

Ireland’s main advantages for real estate investors are:

• Generous tax deductions on rental income
• A partial exemption regime for real estate capital gains on long-term holdings
• One of the most competitive property tax systems in Europe
• A stable and predictable tax environment
• A dynamic real estate market, particularly in major cities like Dublin

However, it’s important to emphasize that real estate investment in Ireland, as in any foreign country, requires a thoughtful and well-informed approach. Investors must consider not only tax aspects but also local market dynamics, economic prospects, and potential risks.

To fully benefit from the tax advantages offered by Ireland, it is strongly recommended to work with local experts, particularly in taxation and real estate law. These professionals can help you structure your investment optimally and navigate the complexities of the Irish tax system.

Ultimately, Ireland represents an attractive opportunity for international real estate investors looking to diversify their portfolio in a favorable tax environment. With a strategic approach and adequate support, real estate investment in Ireland can prove to be a wise and profitable long-term decision.