RENTAL EXPENSES IRELAND – High Court decision in Revenue Commissioners v Thomas Collins


The High Court decision in Revenue Commissioners v Thomas Collins has just been published.

It states that contrary to Revenue’s position, the NPPR (Non Principal Private Residence) charge was in fact an “allowable” expense against rental profits under Section 97(2) TCA 1997.


What was the NPPR Charge?

The NPPR (Non Principal Private Residence) charge was an annual charge of €200 implemented by the Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011.


It related to all residential property situated in Ireland which was not used as the owner’s sole or principal residence from 2009 to 2013.


Examples of the type of residential properties liable for the NPPR charge were:

  • private rented properties including houses, maisonettes, flats, apartments or bedsits.
  • vacant properties – This definition excluded new but unsold residences in situations where they had never been used as a dwelling houses but instead were deemed to be part of the trading stock of a business.
  • holiday homes or second homes.



Previous Tax Treatment of NPPR

Irish Income Tax is calculated on the net amount of rents received or rental profits.  In other words Income Tax is charged on the gross rents received less any allowable expenses as specified in the Taxes Consolidation Act 1997.


The main deductible expenses include:

  • Interest on money borrowed to purchase, repair or improve the property
  • Any rent payable by the landlord in relation to a sub-lease
  • The cost to the landlord of providing any goods or services to the tenant
  • The cost to the landlord of insurance, repairs & maintenance, property management fees, etc.
  • Local Authority Rates where relevant.


For details of allowable rental expenses, please visit


Prior to this ruling the Irish Revenue Authorities and the Department of Finance stated that the payment of the NPPR charge for residential properties was NOT an allowable deduction in calculating Income Tax on the rental profits.


Effect of this Ruling

If this High Court decision is not overturned then it could result in a repayment of taxes overpaid.

There is a time limit for claiming refunds of tax overpaid.  All claims for tax refunds must be made within four years of the end of the year to which the claim relates.



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