Non-Resident Landlord Withholding Tax (NRLWT), sometimes referred to as NLWT, is the Irish Revenue system that applies when a landlord lives outside Ireland but earns rental income from an Irish property. Under this system, 20% of rental income must be withheld at source and paid directly to Revenue unless the landlord appoints an approved collection agent in Ireland. This guide explains how the process works, what responsibilities apply, and how non-resident landlords can remain compliant while managing rental property efficiently.
Managing the tax on your rental income can feel complicated, particularly when you are living outside Ireland. For overseas landlords, understanding the obligations under Irish tax law is essential, as rental income earned from Irish property remains taxable in Ireland regardless of where the owner resides.
Bespoke is one of the few estate agents that offers a collection agent service, designed to make the process simpler for Non-Resident Landlords by managing withholding tax requirements and Revenue reporting as part of the rent collection process.
This article provides a detailed explanation of the Non-Resident Landlord Withholding Tax system, what it means for landlords abroad, and the steps involved in meeting Revenue compliance requirements.
What is NRLWT?
NRLWT stands for Non-Resident Landlord Withholding Tax. It is the system used by Irish Revenue to ensure that rental income earned in Ireland by landlords living abroad is taxed correctly.
As a Non-Resident Landlord, you are obligated to deduct 20% of your rental income at source and pay it directly to Revenue. This withholding tax applies when rent is paid directly from a tenant to a landlord who is not resident in Ireland. In practice, the system is designed to ensure that Revenue receives a portion of tax due on rental income throughout the year, rather than relying solely on an annual tax return filed from outside the country.
More information can be found in the official Revenue guidance on Non-Resident Landlord Withholding Tax (NRLWT).
Why Does Withholding Tax Apply to Non-Resident Landlords?
Irish tax law treats rental income earned from Irish property as Irish-source income. This means that even if a landlord is living in another country, the rental income generated from a property in Dublin or elsewhere in Ireland remains taxable under Irish rules.
Revenue applies withholding tax for non-resident landlords because:
- The landlord is outside Irish jurisdiction
- Rent is being paid from within Ireland
- Tax collection must be secured at source
The withholding mechanism ensures compliance and reduces the risk of unpaid rental tax obligations.
How the 20% Withholding Works
Under NRLWT, 20% of rental income must be deducted before the landlord receives rent.
For example:
- Monthly rent received from tenant: €2,000
- Tax withheld at 20%: €400
- Net rent paid to landlord: €1,600
- €400 remitted directly to Revenue
This withheld amount is not necessarily the landlord’s final tax liability. Instead, it is credited against the landlord’s annual tax return when filed.
Who is Responsible for Deducting the Tax?
The responsibility depends on whether the landlord has appointed a collection agent.
If no collection agent is appointed
The tenant becomes responsible for:
- Deducting 20% of rent
- Paying that amount directly to Revenue
- Completing the necessary reporting
This can place an administrative burden on tenants and may create confusion, especially in standard residential tenancy arrangements.
If a collection agent is appointed
The landlord can appoint a professional collection agent in Ireland. This transfers the withholding and reporting obligations away from the tenant and ensures the process is handled correctly.
Appointing a collection agent transfers the obligations to a professional who can take care of this process for you.
Appointing Bespoke Estate Agents as Your Collection Agent
Under the Non-Resident Landlord Withholding Tax (NLWT) system, a collection agent must:
- Be in receipt of rent from tenants
and - Withhold and remit 20% of the rent payments to Revenue, and submit this with a Rental Notification (RN) in the NLWT system
At Bespoke, we are one of the few property management companies in Dublin who act as a collection agent, and issue Rental Notifications on behalf of our Non-Resident Landlords.
This means overseas landlords do not have to appoint a separate third-party company, as the rent collection and withholding process is managed in-house by the Bespoke accounts team. Landlords seeking structured support can learn more through Bespoke’s property management services in Dublin.
What is a Rental Notification (RN)?
A Rental Notification is the formal submission made through Revenue’s NLWT system. It confirms that:
- Rent has been collected
- The correct amount of tax has been withheld
- The withheld tax has been paid to Revenue
These notifications are a key compliance requirement under NRLWT and must be submitted correctly and on time.
For non-resident landlords, this reporting can be difficult to manage remotely, which is why appointing an experienced collection agent is often the most practical option.
Filing Your Tax Return as a Non-Resident Landlord
Although tax is withheld throughout the year, non-resident landlords must still file an Irish tax return declaring rental income.
The landlord can claim deductions for allowable expenses, such as mortgage interest, repairs, and management fees, which can reduce the taxable rental income.
The tax withheld by the collection agent is credited against the landlord’s final tax liability. If the withheld tax exceeds the liability, a refund may be due.
This is an important point: withholding tax is not an additional charge, but rather a payment on account toward the landlord’s overall rental income tax position.
Allowable Expenses for Rental Income in Ireland
Non-resident landlords may be entitled to deduct certain expenses incurred wholly and exclusively for the rental property. Common allowable deductions include:
- Mortgage interest (subject to Revenue rules)
- Property repairs and maintenance
- Letting and management fees
- Insurance costs
- Service charges (in managed developments)
- Accountancy and compliance costs related to rental income
Correctly claiming these expenses can significantly reduce the final taxable rental profit.
Landlords should maintain proper records and receipts, particularly where they are managing property from overseas.
Using Revenue Online Service (ROS)
Non-resident landlords can use the Revenue Online Service (ROS) to manage their tax affairs, including filing tax returns and making payments.
ROS allows landlords to:
- Submit annual income tax returns
- View credits for withheld NLWT payments
- Claim rental deductions
- Request refunds where applicable
For landlords unfamiliar with Irish tax filing, professional guidance is often recommended to ensure accurate reporting.
Why Collection Agent Support Matters for Overseas Landlords
Owning rental property while living abroad comes with additional complexity beyond standard landlord obligations. These challenges often include:
- Tax compliance under NRLWT
- Currency and banking logistics
- Tenant communication across time zones
- Maintenance coordination from outside Ireland
- Ensuring rent is collected and reported correctly
A structured landlord service helps ensure that tax withholding and rent collection are handled professionally, reducing administrative risk. Further information for landlords can be found through Bespoke’s dedicated landlord services in Ireland.
Common Questions About NRLWT
Do non-resident landlords always pay withholding tax?
Withholding applies unless rent is collected through an approved collection agent. Without one, the tenant must withhold tax.
Does the 20% deduction cover the landlord’s full tax bill?
Not necessarily. It is credited against the landlord’s final liability after deductions and annual tax filing.
Can landlords receive a refund?
Yes. If the withheld amount exceeds the final tax due, Revenue may issue a refund once the return is filed.
Is appointing a collection agent mandatory?
It is not mandatory, but without one, tenants become responsible for withholding, which is often impractical in residential lettings.
Conclusion
The Non-Resident Landlord Withholding Tax system is an important part of Irish rental income compliance for landlords living abroad. The requirement to withhold 20% of rent at source can create complexity, particularly when landlords are managing property remotely. By appointing a registered collection agent, landlords can ensure that withholding tax, Rental Notifications, and Revenue reporting are managed correctly, while maintaining proper oversight of rental income. For more information on this, or to speak to an agent feel free to call us on (01) 6619670 or contact Bespoke directly through the Bespoke Estate Agents contact page.
