The Revenue have unveiled a new system, designed to reinforce the tax laws for nearly 20,000 private landlords based outside Ireland.

The forthcoming Non-resident Landlord Withholding Tax (NLWT) system will mandate that tenants or collection agents reserve a part of the monthly rent from their landlord and forward it to Revenue through this online portal. These rules will not be applicable to properties rented out by investment funds. Currently, landlords who do not reside in Ireland but rent out properties here have to report the rental income to the Revenue and pay tax at the standard rate of 20 percent.

This could be facilitated through a collection agent based in Ireland, like an estate agent, solicitor, or a person nominated to represent the landlord. The collection agent collects rent from tenants and files an annual tax return on behalf of the landlord. Alternatively, non-resident landlords have the option to request their tenants to deduct 20 percent from their rent and submit the withheld tax to Revenue by filling out a Form R185 once a year along with their personal tax return. In this case, the non-resident landlord would then also submit an income tax return at year-end.

However, a new system under the Finance Act 2022 will be enforced from July 1st. Through the Revenue Online Service or myAccount, both collection agents and tenants will have to withhold 20 percent of rent payments and remit this directly to Revenue as a Rental Notification monthly. Collection agents and tenants will no longer be required to submit returns to Revenue concerning the rental income of non-resident landlords. The responsibility will rest on the landlords to file an annual Income Tax Return to recover any withheld credits they qualify for.

Revenue has stated that there are about 20,000 non-resident landlords who
receive rental income from properties situated in Ireland. A representative stated that the new system is expected to result in improved compliance and customer service in this sector.