Lisa Lokasto

Irish landlords are heading into uncharted territory.

Rental reforms are coming into effect from 1 March 2026.

Before looking at what’s changing, here’s a quick recap on how landlords are taxed today

• Rental income in a company is treated as passive (Case V) income, not trading, and therefore taxed at 25% corporation tax.
• If the rental company is a close company (controlled by five or fewer participators, which is most companies), then undistributed rental income can suffer a 20% Close Company Surcharge (additional tax charge) if not distributed within 18 months of year end.
• Salary – deductible for the company but taxed at marginal rates in the individual’s hands (again up to 52%).
• Dividend – no deduction for the company as paid out of after tax profits. Dividend income is also taxed at marginal rates in the hands of the individual.

If profits are left in the company, there’s risk of a surcharge up to 20% and cash is “trapped” in the company. So while the corporate has it’s benefits, it can also result in an effective double layer of tax if not managed carefully.

Investment companies face tighter rules on expense deductions too. In particular, directors’ remuneration and related management charges are only accepted without question up to 10% of gross rental income (or up to 15% where directors are heavily involved in managing the properties and no separate management fee is charged). Any higher amounts are subject to Revenue scrutiny and may be disallowed.

The bottom line is that rental profits in a company are heavily taxed, with limited scope for deductions.

There are nuances for short term lettings (AirBnB), service accommodation, foreign landlords etc. that aren’t going to be covered here.

Rent PRESSURE ZONES

Tax is only half the story. Rent Pressure Zones (RPZ) are the other big factor landlords need to keep in mind…

When you let a property in an RPZ, the starting rent must be at (or below) the market rent for comparable properties in the area. You’re allowed to set it at full market level only if:

• it hasn’t been let in the previous 2 years, or
• it qualifies as a “new tenancy” under the exemptions (e.g. newly built, substantially refurbished).

You must give the tenant written confirmation of the previous rent and the date of the last rent setting and once set, the rent can only be reviewed once every 12 months.

The increase allowed is the lower of:

• 2% per annum, or
• the general inflation rate (HICP).

WHAT’S CHANGING IN 2026

Before June 2025, RPZs only applied in designated areas. From 20 June 2025 to 28 Feb 2026 the whole country is treated as a RPZ. After 1 March 2026, RPZs will be abolished but replaced by a new reformed national system

Ultimately, the fine print of the legislation will determine how these reforms take effect. Based on government announcements, here’s what we know so far:

RPZs Abolished

From 1 March 2026, a new national rent control system will apply to all tenancies.

Six-Year Rolling Tenancies

All new tenancies will move to a six-year rolling basis. During that time, rents can only rise in line with the permitted annual formula. At the end of each six years, the tenancy continues automatically unless ended on a permitted ground, and at that point a rent reset is possible.

Rent Increase Restrictions

Annual increases within the six year term will be capped by inflation (CPI), subject to a maximum of 2% during high inflation periods. For new builds (with planning commencement notices filed from June 2025), the link will be to CPI alone with no 2% ceiling.

Rent Resets

At the start of a new tenancy or at the end of a six-year cycle, landlords can reset rent to market levels. However, resets can’t follow a no-fault eviction. Existing sitting tenants are protected at March 2026 so they will not face a sudden rent reset when the new regime begins. Their rents will continue under the current RPZ cap until their tenancy naturally reaches the end of a six-year cycle or they vacate.

Eviction Rules

This is the most significant shift. Large landlords (those with four or more tenancies) will effectively lose the ability to terminate on no fault grounds, other than in very limited circumstances. Small landlords (three or fewer tenancies) will have more flexibility – for example immediate family use, personal hardship, or returning from abroad during the six-year cycle and at the end of a six-year term they may end a tenancy for sale, refurbishment, family occupation, or change of use.

But there is some good news…

Residential Premises Rental Income Relief (RPRIR),

RPRIRs will provide tax relief (in the form of a deduction, not a credit) for private landlords from 2024 to 2027. This is an annual relief but the property must remain in the rental market for at least four years from the first year the relief is claimed. This will not apply to corporate landlords or commercial lettings.

Value of the relief:

• For 2024: 20% deduction on €3,000 = €600.
• For 2025: 20% deduction on €4,000 = €800.
• For 2026: 20% deduction on €5,000 = €1,000.
• For 2027: 20% deduction on €6,000 = €1,200.

BOTTOM LINE

The March 2026 reforms tilt the balance more toward tenant security. For landlords, the mix of high taxes, capped rent growth and limited exit routes makes rental investment less attractive and corporate structures don’t solve the problem, they often add another layer of tax.

Critics warn this could drive landlords out of the market, stabilise it, or reshape it in favour of long term institutions. The truth is, the impact won’t be clear until the new system beds in.

If you’re a landlord, or considering becoming one, now is the time to review your options. Contact us to discuss how the changes will affect you and to plan ahead.

-Lisa