Rental losses in Ireland: carried forward, ring-fenced, and behind capital allowances

The loss goes forward, and only forward

If you make a loss, you can carry it forward until you can offset it against a rental profit. There is no stated expiry in the guidance: the loss waits for a profitable year rather than evaporating at the end of the next one.

What you cannot do is more instructive:

• You cannot carry them back to a previous year. A bad year does not reopen a good one.
• You can only offset the loss against Irish rental income. The loss is ring-fenced by geography as well as by category.
• You cannot offset foreign rental losses against an Irish rental profit. They go against foreign rental income only, which mirrors the treatment from the other direction.
• You cannot offset rental losses made by your spouse or civil partner against your rental profits. Joint assessment for income does not pool losses between two owners.

Capital allowances come first

For a furnished holiday property this matters more than in a bare long-term let, because the fit-out generates allowances year after year. Put the brought-forward loss in first and you may exhaust it against a profit that the allowances would have absorbed anyway, leaving the allowances stranded. Put them in the order Revenue specifies and the loss stays available for a later year. The sums are the same size; the sequence decides what survives.

Uneconomic lettings

One category is excluded outright. You cannot offset losses made from uneconomic rentals against other rental profits, an uneconomic rental being one where it is not possible to make a profit from the rent received. The test is about the rent itself, not about a single disappointing year.

What we ask owners to keep

Where a property sits in a company, or where the letting is genuinely a trade rather than a rental, different parts of the code come into play and the answer changes. That is a conversation for your accountant with the figures in front of them. We study every request and tell you honestly whether and how we can help.