Mortgage Interest Relief · 2026
Mortgage Interest Relief for Irish Landlords 2026: 75% Deductible
Mortgage interest is one of the biggest deductible expenses for Irish landlords. In 2026, you can deduct 75% of your mortgage interest from rental income before tax — up from 70% in 2025. This guide covers how the relief works, the difference between interest-only and capital repayment mortgages, the €5,000 pre-letting expense allowance, and worked examples for each scenario. Use our Landlord Tax Calculator to see your full rental profit after all deductions.
How Mortgage Interest Relief Works
Mortgage interest on Irish rental properties has been restrictedsince 2010 — you cannot deduct 100% of the interest. Instead, only a set percentage is allowable. The rate has fluctuated over the years and is currently being phased back up toward full deductibility.
Historical Deductibility Rates
| Year | Deductible % | Notes |
|---|---|---|
| 2010 – 2016 | 75% | Restriction introduced |
| 2017 | 75% | Same rate retained |
| 2018 – 2020 | 80% | Partial restoration |
| 2021 – 2024 | Variable | Temporary rates adjusted |
| 2025 | 70% | Phased increase began |
| 2026 | 75% | Current rate |
| Future | 100% (target) | No fixed date yet |
The key rule: only the interest portion of your mortgage payment qualifies. If you have a capital repayment mortgage, the capital element is never deductible. Your lender issues an annual interest certificate showing the total interest paid — that's the figure to use.
Interest-Only vs Capital Repayment Mortgages
The type of mortgage you hold affects how much interest you pay — and how much relief you can claim. Here's how the two structures compare for tax purposes.
🏦 Interest-Only Mortgage
- ✓Every payment is 100% interest — simple to calculate
- ✓75% of all payments are deductible (in 2026)
- ✓Monthly payment is lower — improves cash flow
- ⚠No capital repayment — loan balance never decreases
- ⚠May need to refinance or sell to repay the principal
- ⚠Lenders typically offer interest-only for limited periods (5-10 years)
📈 Capital Repayment Mortgage
- ✓Loan balance decreases over time — building equity
- ✓Own the property outright at end of term
- ✓Interest portion declines over time as capital is repaid
- ⚠Only the interest element is deductible — capital is not
- ⚠Monthly payments are higher — reduces short-term cash flow
- ⚠Must track interest portion from lender's annual statement
📊 Example: €300k Mortgage at 4.5% APR
| Interest-Only | Capital Repayment | |
|---|---|---|
| Monthly payment | €1,125 | €1,520 |
| Annual payment | €13,500 | €18,240 |
| Annual interest | €13,500 | €13,350 |
| Annual capital | €0 | €4,890 |
| Deductible (75%) | €10,125 | €10,013 |
Tax saving at 40%
~€4,050/yr
Interest-only, 40% marginal rate
Capital repayment saves ~€50 less in tax per year because the interest portion is slightly lower (capital is being repaid).
Pre-Letting Expenses: Up to €5,000
If a rental property has been vacant for at least 12 continuous months, you can claim pre-letting expenses of up to €5,000 to prepare it for new tenants. This is a valuable relief — it allows you to deduct costs that wouldn't normally be allowable as day-to-day maintenance.
Qualifying Pre-Letting Expenses
📊 Example: Pre-Letting Expenses Claim
A property in Galway was vacant for 14 months. The landlord spends €4,200 on repairs and upgrades before the new tenancy begins. Here's how the claim works:
| Plumbing repairs | €1,200 |
| Painting & decorating | €1,500 |
| New flooring (2 rooms) | €900 |
| Smoke alarms & fire safety | €300 |
| Garden clearance | €300 |
| Total qualifying spend | €4,200 |
| Max allowable | €5,000 |
| Claimable amount | €4,200 |
Tax saving at 40%
€1,680
€4,200 × 40% marginal rate
If the spend were €6,000, only the first €5,000 would be deductible — the remaining €1,000 is not claimable under this relief.
Full Worked Example: €12,000 Interest
Let's walk through a complete example. A Dublin landlord has a mortgage on an investment property and paid €12,000 in mortgage interest during 2026. Here's how the relief works step by step.
📊 Mortgage Interest Relief Calculation
| Total mortgage interest paid | €12,000 |
| Deductible percentage (2026) | 75% |
| Non-deductible portion | 25% |
| Allowable deduction | €9,000 |
| (€12,000 × 75%) | = €9,000 deduction |
Tax saved on the deduction
€3,600
€9,000 × 40% marginal rate
Actually you pay tax on €3,000 less rental profit vs if relief were 100%. The non-deductible 25% (€3,000 × 40% = €1,200) is the extra tax you pay because of the restriction.
Full Rental Profit Picture
| Annual rental income | €30,000 |
| Mortgage interest (75% of €12k) | -€9,000 |
| Management fees (8%) | -€2,400 |
| Insurance | -€600 |
| Repairs & maintenance | -€1,500 |
| Other expenses (RTB, etc.) | -€500 |
| Taxable profit | €16,000 |
| Tax @ 40% + USC + PRSI | ~€8,200 |
After-tax net rental income
€7,800
per year (approx)
If relief were 100%, the taxable profit would be €13,000 and tax would be ~€6,700 — saving an extra €1,500 per year.
How to Claim Mortgage Interest Relief
Get your lender's interest statement
Banks and mortgage lenders issue annual interest statements (usually in January) showing the total interest paid on each mortgage account for the previous tax year. This is the authoritative figure for your claim.
Enter on your tax return
On Form 11 (or Form 12 via myAccount), enter the total interest paid in the rental income section. Revenue's system automatically applies the 75% deductible rate. You don't calculate the 75% yourself — just enter the gross interest figure.
Keep supporting records
Retain your lender's interest statements, mortgage agreements, and any correspondence about interest rates or restructuring. Revenue can request these for up to 6 years after the filing year.
File on time
Form 11 returns for the 2026 tax year are due by 31 October 2027 (paper) or mid-November 2027 (ROS online). Late filing penalties apply from day one.
Mortgage Interest vs Other Landlord Deductions
Mortgage interest is just one of many deductible expenses. Here's how it compares with other common deductions in terms of tax treatment.
| Expense | Deductible % | Notes |
|---|---|---|
| Mortgage interest | 75% | Only interest portion, not capital |
| Management/letting agent fees | 100% | Standard deductible expense |
| Repairs & maintenance | 100% | Not improvements or extensions |
| Insurance | 100% | Buildings, contents, liability |
| Pre-letting expenses | Up to €5,000 | After 12-month vacancy |
| Capital improvements | 0% | May qualify for Capital Allowances instead |
| Mortgage capital repayment | 0% | Never deductible |