Deduction for Retrofitting

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Deduction for Retrofitting

Taxes Consolidation Act 1997 has introduced a new relief which is available to residential landlords. This relief allows landlords to take a deduction for expenses relating to the retrofitting of residential premises when calculating rental profits between 1st January 2023 and 31st December 2025. You cannot claim a deduction for retrofitting in the year the works take place. Instead, you can claim the relief in the following year after the retrofit. This relief is available for a maximum of two properties.

The conditions for claiming this relief are as follows:

  • The property must be situated in Ireland and owned by the assessable person.
  • The property must be let to a residential tenant and this tenancy must be registered with the RTB during the period when the works are being carried out.
  • The deduction is only available to persons who have received an approved retrofitting grant from the Sustainable Energy Authority of Ireland (SEAI).
  • All LPT obligations must be up to date.
  • A valid Tax Clearance Certificate is required.

The deduction is available on the lesser of €10,000 or the costs incurred completing the retrofit. Relief is only available on the net amount after the grant.

The deduction for retrofitting also provides relief for USC and PRSI.

This relief will be clawed back if, within 2 years of completing the retrofit:

  • Obligations under the Residential Tenancies Act 2004 are breached.
  • The property is sold or transferred.
  • The property is no longer let by a residential tenant.
  • The tenant terminates the tenancy agreement.
  • The tenancy agreement is terminated due to breach of contract.

The exceptions to the above clawback guidelines are:

  • If the property is re-let to a residential tenant.
  • You are actively trying to let the property.



John owns a residential property and meets all of the above conditions. He decided to retrofit his property in 2024. The total cost of the retrofit is €25,000. John received a grant of €15,000 from the Sustainable Energy Authority of Ireland (SEAI). John can claim a deduction of €10,000 in relation to retrofit in 2025.