Update on individual obligations for non-resident landlords

A non-resident landlord is someone who is not resident in Ireland, but rents out a property in Ireland. Income from renting out a property, or from another source that qualifies as rental income, is taxable. This income must be declared to Revenue.

For non-resident landlords with rental income there are two options available to them:

1. Engage the services of a collection agent, who collects the rent and files the tax return in the name of the non-resident landlord
2. Have the tenant withhold 20% of the rent and submit it directly to Revenue

If an individual has other sources of Irish income then there will still be a requirement to file a personal tax return.  If however the individual has no other sources of Irish income and has engaged a collection agent to file a return of the rental income then there is no other filing obligation in Ireland.

In many cases, non-resident landlords were not following either of the above options, and were simply filing and paying their own tax.  Revenue will only accept the correct statutory approach from January 2023 and therefore require non-resident landlords who do not have a collection agent in place by 31 December 2022 (and advise Revenue that they have now appointed a collection agent). Otherwise the tenant will be required to withhold the tax.

Further updates to obligations of Non-Resident Landlords, the Non-Resident Landlord Withholding Tax (NLWT) and the new NLWT system being implemented.

Finance Act 2022 introduced changes to the administration of Irish withholding tax for Non-Resident Landlords and subject to a ministerial order, a new Non-Resident Landlord Withholding Tax system has been implemented. 

The system went live on the 1st of July, and it allows tenants or collection agents to record tax withheld and pay it directly to Revenue using ROS. The tax is then credited to the landlord using a prepopulated entry in their own personal tax returns.

Importantly, Revenue have also confirmed that with the implementation of this new system, collection agents are no longer to be considered chargeable persons in respect of the rents due to the NRL in cases where they comply with all of the requirements of the new system.

How does this impact you?
 

Collection Agents

1. Collection agents will no longer be required to register for or file an income tax return for the rental income due to the Non-Resident Landlord.
2. Collection agents are required to withhold and remit 20% of the gross rental payment to Revenue via the NLWT system on ROS by making a Rental Notification. They must submit the Rental Notification and pay the accompanying tax withheld to Revenue within 21 days of making the rental payment to the Non-Resident Landlord.
    

Tenants 

1. Tenants will no longer be designated chargeable persons and will not be responsible for accounting for the tax withheld (20%) in their own personal tax return.
2. Tenants are required to withhold and remit 20% of the gross rental payment to Revenue via the NLWT system on ROS by making a Rental Notification. They must submit the Rental Notification and pay the accompanying tax withheld to Revenue within 21 days of making the rental payment to the Non-Resident Landlord.
    

Non Resident Landlords (NRLs)

1. NLRs will be required to file an income tax return.
2. A credit will be available to the non-resident landlord for the tax that has been withheld and paid directly to Revenue through the new online system.
    

There is a Tax and Duty Manual which has been published by Revenue which provides a guide on the operation of the new system and offers guidance on the information which needs to be provided to complete Rental Notifications. 

The links to the new system are now available and active on ROS here.