From 1st July 2023, the system in which non-resident landlords declare income tax on rental income received is changing. Currently, If you are a non-resident landlord, to pay tax on your irish rental income you have two options:
- engage the services of a collection agent to collect rent on your behalf with no deduction of tax or
- your tenant withholds 20% of the rent due and submits it Revenue
New System
From July 2023, the following changes will be in force;
A new system will be launched on 1st July – the Non-Resident Landlord Withholding Tax (NLWT) System. The new NLWT system enables tenants or collection agents to make Rental Notifications (RN) when making payments to a non-resident landlord. This notification and accompanying payment, needs to be submitted within 21 days of paying the rent to the non-resident landlord.
The system is available to the agent, the collection agent, the landlord and the tenant. Landlords will be able to claim the withheld credits on their annual Income Tax Return (Form 11) or CT1.
Therefore,
If a non-resident landlord has appointed a collection agent;
- this agent will not be liable for tax on income received on behalf of the landlord.
- They will be required to withhold 20% of the rental payment and make a rental notification through the new Non-Resident Landlord Withholding Tax (NLWT) System
If the tenants continue to pay directly to a non-resident landlord;
- Will no longer be chargeable for the withholding amount of 20% on their own personal tax return
- They will be required to withhold 20% of the rental payment and make a rental notification through the new Non-Resident Landlord Withholding Tax (NLWT) System