Tax Brief: Pre-Letting Expenses

Expenses incurred on rental properties prior to letting was previously disallowed as a deduction against rental income when computing taxable rental profits.

Finance Bill 2017 includes new measures permitting a deduction for pre-letting expenses incurred on previously vacant residential properties where:

• The property was vacant for at least 12 consecutive months before it is let
• The expenditure would have qualified as a rental deduction for tax purposes if the property had been let when the expenditure was incurred
• The amount of the deduction is capped at €5,000 per vacant property

If the property ceases to be let as a residential property within four years of its first letting, any relief claimed will be clawed back.