1. Is stamp duty, transfer tax or a similar tax payable on the direct sale, purchase or leasing of real estate? If so, what are the rates and who is required to pay the duty or tax?

Yes, stamp duty is payable on the direct purchase and direct leasing of real estate situated in Ireland.

Stamp duty on the purchase of real estate is payable by the purchaser on the higher of the consideration paid or the market value of the property transferring. 

The purchase of commercial real estate is subject to stamp duty at a rate of 7.5%. There is a scheme that may allow a refund of a portion of the stamp duty if the property is later developed for residential use. This scheme is due to end on December 31, 2025.

The purchase of residential real estate is subject to stamp duty at a rate of 1% up to a value of €1m,2% on the consideration between €1m to €1.5m and 6% on the consideration in excess of €1.5m (for instruments executed on or after October 2, 2024). A higher rate of 15% applies to the purchase of 10 or more residential houses or duplexes at a time, or cumulatively in a twelve-month period, but a partial refund is available where the properties are leased to a local authority or approved housing body for social housing. The refund is based on the difference between the standard rate and the increased rate.

The lessee may be liable to stamp duty on the rent and/or premium on leases of both residential and non-residential real estate.

A lease for residential real estate is exempt from stamp duty if:

1. the period of the lease is 35 years or less or an indefinite period; and
2. the annual rent is €50,000 or less.

For leases that are not exempt, stamp duty is due on the average annual rent. The rate depends on the term of the lease.

Stamp duty is also payable on any premium. The rate payable on the premium depends on the type of real estate covered by the lease. If the real estate is residential, the same rate is payable as on the transfer of residential real estate. If non-residential, the rate is the same as on the transfer of non-residential real estate.

2. Is stamp duty, transfer tax or a similar tax payable on the indirect sale or purchase of real estate, e.g. by means of the sale of an SPV which holds real estate in the jurisdiction? If so, what are the rates and who is required to pay the duty or tax?

The purchase of shares in an Irish incorporated company is generally subject to stamp duty at a rate of 1% but a higher rate of 7.5% can apply in certain cases.

Stamp duty at the 7.5% rate is payable on written agreements or contracts to buy:

• shares (whether in an Irish or non-Irish company);
• units in an Irish Real Estate Fund (IREF) ("units"); or
• interests in partnerships ("interests")

where certain conditions are met.

The 7.5% rate applies where the following conditions are satisfied:

• the shares, units or interests derive their value or the greater part of their value (50%) from non-residential real estate;
• the purchase results in a change in control over the company, IREF or partnership;
• the purchase results in a change in control over the real estate owned by the company, IREF or partnership; and
• the company, IREF or partnership deals in land or develops land for non-residential purposes.

3. Is value added tax, goods and services tax or a similar tax payable on the sale or purchase of real estate, and the letting of real estate? If so, what are the rates and who is required to pay the tax?

The VAT treatment of real estate transactions is fact specific but where VAT applies to a sale, the applicable rate is 13.5%.

The supply of freehold / freehold equivalent "new" property is subject to VAT at 13.5%. The supply of freehold / freehold equivalent "old" property is exempt from VAT, unless the vendor and purchaser exercise a joint option to tax. "New" properties include:

• the first supply of a completed property within 5 years of completion;
• the second and subsequent supply of a new property within 5 years of completion, unless it has been occupied for at least 2 years;
• old property which has been significantly re-developed.

Generally, lease interests in property are VAT exempt but there is a landlord’s option to tax the rental subject to certain restrictions.

Transfer of business relief (TOBR) may apply where the real estate being transferred is subject to an existing letting agreement, an agreement for lease or a licence to occupy as together those assets are capable of constituting an independent business or undertaking.

4. Are there any annual taxes that may be payable on the ownership of real estate, e.g., annual land tax, municipal taxes, surtaxes, etc.?

Local Property Tax (LPT)

LPT is generally payable by owners of Irish residential real estate subject to some exceptions. LPT is based on the market value of the residential real estate on the valuation date every year (1 November).

In some cases, LPT is payable by a person other than the owner:

• by a tenant with a long-term lease of more than 20 years; or
• by a person who has a right to live in the property for life or for more than 20 years or a right to live there "to the exclusion of all others".

If a property is rented on a standard short-term lease (less than 20 years), the landlord pays the LPT.

Property values are arranged into a number of bands up to €1,750,000. The LPT liability is calculated by applying a charge for the relevant band. Residential properties valued over €1,750,000 are assessed on the actual value at 0.1029% on the first €1,050,000, at 0.25% on the portion of the value between €1,050,000 and €1,750,000 and 0.3% of the portion of the value above €1,750,000.

The rates of LPT may be adjusted upwards or downwards by local authorities by an adjustment factor that must not exceed 15% of the existing rate.

Vacant Homes Tax (VHT)

VHT is an annual tax that applies to residential properties in use as a dwelling for less than 30 days in a 12-month chargeable period. An exemption may be available in certain circumstances. Any liability to VHT is in addition to a liability to LPT. Generally the chargeable person is the owner of the property.

The rate of VHT for the chargeable period November 1, 2024 to October 31, 2025 is seven times the basic rate of LPT for 2025. The basic rate of LPT can be increased or decreased by the Local Authority.

Residential Zoned Land Tax (RZLT)

RZLT is an annual tax calculated at 3% of the market value of land within its scope. It has applied since 2024 with the first liability due date deferred until February 1, 2025. The obligation to register for RZLT arises in respect of a relevant site which is land that appears on revised RZLT maps published by the relevant local authorities no later than 31 January each year (commencing from 2025). Certain properties are excluded from the tax such as existing residential properties liable for LPT.

RZLT will apply to land that is:

• zoned for residential use; and
• serviced.

The liable person for the purposes of RZLT is the "owner" of the relevant site. Recent legislative changes permit landowners to seek to have their land re-zoned to reflect the economic activity undertaken on the land to potentially bring them outside the scope of the RZLT, in addition to introduction for an exemption in respect of land subject to judicial review proceedings brought by a third party.

5. What is the tax rate imposed on rental income?

The tax rate on rental income depends on whether the owner is an individual or corporate and on the owner's tax residency.

An Irish company is subject to tax at a rate of 25% on rental income where it is taxed under Case V. A close company surcharge of 20% applies to rental income of a close company (broadly a company which is controlled by 5 or fewer persons) that is not distributed within 18 months of the end of the accounting period.

A non-resident company is subject to Irish tax at a rate of 25% on rental income.

In some cases, income from property rental can be taxed as trading income at a rate of 12.5% for companies.

Both resident and non-resident individual landlords are subject to income tax, the universal social charge (USC) and, in the case of resident individuals, PRSI (social security) on rental income at a combined marginal rate of up to 55%.

6. Is interest on borrowings used to acquire real estate deductible for tax purposes against rental income? If so: (i) are there any restrictions, such as thin capitalization, transfer pricing or interest limitation rules; and (ii) is there any withholding tax on interest?

Interest payable on a loan to purchase, improve or repair a rental property is deductible against rental income subject to certain conditions. If the income is taxed as part of a trade, a deduction is available for interest which is incurred "wholly and exclusively" for the purposes of the trade.

In the case of residential properties, the tenancy must be registered with the Residential Tenancy Board (RTB) and ongoing compliance in relation to the registration requirements must be maintained in order to be eligible for a deduction for interest on rental income. Interest payable on any rental property prior to its first letting and occupation is not deductible. Interest payable on a property after it ceases to be available for letting is not deductible. Interest on loans drawn down to acquire a residential property from a spouse or civil partner that is then rented is also not deductible.

A refinancing of a loan or loans used to acquire, improve or repair a rental property could technically not be deductible on the basis that the new loan is to replace existing borrowings and not directly used to acquire, improve or repair a rental property.

However, Revenue guidance provides that a deduction is allowed for the interest on the “replacement loan”, subject to the rules for the interest deductibility detailed above, if in relation to a residential property loan:

• the original loan is replaced for genuine commercial reasons;
• the replacement loan is at arm's length; and
• the purpose of the replacement is not the avoidance of tax.

In relation to a commercial property loan, the replacement loan must be:

• for genuine commercial reasons; and
• not part of a scheme or arrangement the main purpose of which is the avoidance of tax.

Transfer pricing rules in line with OECD principles may apply in certain cases. However, SMEs are currently exempt from transfer pricing rules.

Ireland has also implemented anti-hybrid rules and an interest limitation rule in line with the relevant EU Directives. The ILR limits the maximum tax deduction for net borrowing costs to 30% of EBITDA. There are a number of exceptions to the ILR including:

• a €3 million de minims (i.e. where the Irish taxpayer's net borrowing costs are less than €3 million);
• where a company is a standalone company, being a company that has no associated enterprises or permanent establishments;
• Long-Term Public Infrastructure Projects i.e. a project to provide, upgrade, operate or maintain a large-scale asset in the general public interest.

A withholding tax at 20% applies to payments of interest other than "short" interest (interest on loans with a term of less than a year). However, there are a number of exemptions under domestic law, including for the following payments:

• payments by a company to a company which is resident in the EU or a country with which Ireland has entered into a double tax agreement ("DTA") and not acting through a branch or agency in Ireland where a) the other country imposes a tax that generally applies to interest receivable from foreign sources; or) the company would be exempt under the terms of the DTA. 
• payments to Irish banks and certain other Irish entities such as regulated funds or Section 110 companies.

Where a domestic law exemption does not apply (e.g. because the payor is an individual), there may be relief under the terms of a DTA. Ireland has signed 76 tax treaties with 74 currently in effect.

7. Are there deductions for capital expenditure available against rental income for tax purposes, for example capital allowances or deductions for depreciation? If so, are deductions available for expenditure on both land and buildings, or on buildings only?

Plant and machinery allowances may be available for qualifying expenditure which allows the expense to be written off over an 8-year period on a straight-line basis (12.5% per annum). Allowances are also available for certain industrial buildings (4% per annum).

8. Are there any other material restrictions on the costs and expenses which may be deducted in calculating a person's taxable rental income, e.g. transfer pricing or anti-hybrid rules?

Where the income is taxable as rental income (which is usually the case) the expenses incurred must meet the following conditions:

• wholly and exclusively relate to the rental property;
• the expense must be of a revenue nature; and
• the deductible expenses must generally be incurred during the currency of the lease. However, expenses incurred between leases can still be regarded as deductible as long as the landlord takes possession of the property between leases but does not occupy the rental property. However, certain pre-letting expenses are deductible and recent legislative amendments have extended the application of this relief until the end of 2027.

Where the rental activity is a trade, expenses are only deductible where certain criteria are satisfied- the expense must be wholly and exclusively incurred for the purposes of the trade and be revenue rather than capital in nature. Excessive expenses would not satisfy the "wholly and exclusively" test.

Transfer pricing rules apply to some taxpayers but there is currently an exemption for companies which are SMEs. Ireland has also implemented EU anti-hybrid rules and the ILR as outlined above.

9. Are there any restrictions on the use, and/or the carry forward, of losses?

Rental losses are available to be carried forward (indefinitely). The losses cannot be carried back to a prior year or offset against other forms of income. The rental loss must be used to the maximum extent possible in the earliest tax year. Rental capital allowances must be claimed in priority to rental losses forward.

If the income forms part of a trade, such losses may be carried forward but there is greater flexibility to use them against other income in the same year.

10. Are capital gains arising on the direct sale of real estate taxable? If so, what are the rates and are there any exemptions?

Yes. Capital gains tax (CGT) at a rate of 33% generally applies to the gain on the sale of Irish real estate. Limited exemptions apply e.g. on the sale of an individual's principal residence. An Irish regulated investment fund is exempt from tax on gains arising on the disposal but has a liability to account for tax on distributions to certain investors.

If the sale forms part of a trade, a rate of 12.5% or 25% may apply to the gain depending on the facts.

11. Are capital gains arising on the indirect sale of real estate taxable, e.g. by means of the sale of an SPV which holds real estate in the jurisdiction? If so, what are the rates and are there any exemptions?

An Irish tax resident is chargeable to tax on the capital gain arising on the sale of an SPV. The rate is 33%. If the value of the real estate is less than 50% of the value of the shares, an Irish corporate seller could avail of the participation exemption where conditions are satisfied.

An Irish tax non-resident is within the charge to CGT at a rate of 33% on the sale of an SPV whose shares derive more than 50% of their value from Irish land, buildings, mineral rights and exploration rights (known as "specified assets"). If the shares do not derive 50% of their value from such assets, a non-resident is exempt from Irish CGT.

12. Is there a withholding tax on rental income?

Where rents are paid to a non-resident landlord, the tenant is obliged to withhold tax at the standard rate of 20% from the rents payable unless the landlord appoints an Irish agent to collect the rents on its behalf.

From July 1, 2023, there is a new Non-Resident Landlord Withholding Tax (NRWT) system. Collecting agents or tenants will make a notification when rent is paid to a non-resident landlord. Collection agents or tenants will withhold and remit 20% of the rent payment to Revenue. This withholding tax may be offset against the landlord's Irish income tax liability.

13. Is there a withholding tax on capital gains derived from real estate? If so, does the withholding tax apply to both direct and indirect sales, or to direct sales only?

The purchaser of interests in Irish real estate and shares or loans that derive, directly or indirectly, at least 50% of their value from "specified assets" must withhold 15% from the purchase consideration unless the seller has provided a clearance certificate issued by Irish Revenue. An Irish resident taxpayer making a disposal is automatically entitled to a clearance certificate. A non-resident person will only receive a certificate where they have satisfied Irish Revenue that no CGT liability arises on the sale or that the CGT liability will be paid.

The 15% withholding applies to in scope assets worth more than €500,000 or assets that are houses or apartments worth more than €1 million.

14. Does the jurisdiction have a REIT regime? If so, please outline the tax treatment of the REIT and the main conditions that must be satisfied to enter and remain within the regime.

Yes, Ireland has a REIT regime.

The REIT regime provides a tax exemption on the income and chargeable gains of a real estate rental business held within a company which satisfies the REIT conditions. The property rental business must consist of at least three properties (there is a three-year build-up period allowed), and no one property should make up more than 40% of the total market value of properties in the business.

Distributions out of the REIT to shareholders are liable to dividend withholding tax at the rate of 25% subject to a number of exceptions. For example, shareholders who are tax resident in countries that have a DTA with Ireland can benefit from a lower dividend withholding tax rate if that is allowed under the relevant DTA.

The REIT must:

• be Irish tax resident and Irish incorporated;
• distribute 85% of the income from its property rental business by way of property income dividend;
• derive 75% of its aggregate income from the property rental business. It may carry on other “residual” business, but the tax exemption applies only to the income and chargeable gains of the property rental business;
• not be a close company;
• maintain a property financing costs ratio (the ratio of the sum of the property rental income and finance costs of the property business to the finance costs of the property business) of at least 1.25:1;
• use at least 75% of the market value of the assets of the REIT for the property rental business;
• not incur debts which exceed 50% of the market value of the assets of the REIT; and
• have its shares traded on the main market of a recognised stock exchange in the EU.

15. Apart from REITs, are there any other tax-efficient real estate investment vehicles or structures which are commonly used to acquire, hold and exploit real estate in the jurisdiction?

Regulated investment funds are commonly used to hold Irish real estate. A fund which derives 25% or more of the market value of its assets from Irish real estate is an Irish Real Estate Fund (IREF).

Such a fund is generally exempt from Irish tax on income and gains (with some exceptions where certain debt and financing cost deduction limits are breached).

Where a fund is categorised as an IREF, 20% withholding tax must be operated by the fund on distributions of income subject to exceptions. Certain categories of investors are exempt from the withholding tax, including Irish pension funds, Irish regulated funds, life assurance companies and their EEA counterparts which are subject to equivalent supervision and regulation.

16. Are there any structures commonly used to mitigate real estate tax liabilities on acquiring and/or disposing of real estate?

The IREF regime can mitigate liabilities, particularly where the investors fall into an exempt category.

It is common for non-resident companies to acquire Irish real estate. Due to the difference in stamp duty rates, a purchaser will often have a preference for acquiring the shares in a real estate owning company.

17. Are there any material differences in the way individuals and companies are taxed on acquiring, letting and/or disposing of real estate?

As outlined above, the rates of tax on rental income are different for individuals and companies. On disposal, a tax rate of 33% generally applies to the gain regardless of the status of the investor.

This guide does not constitute tax advice and readers should note that the laws of each jurisdiction are regularly refined and/or revised, so the statements made in this report are not definitive. However, this guide does provide a summary overview of the state of the law as at 31 January 2025 and will hopefully serve as a useful tool for investors to ensure they understand the unique provisions and distinctions in the various jurisdictions.