Marc Ó Cathasaigh (Waterford, Green Party)
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216. To ask the Minister for Finance the take-up, by county, of the deduction for retrofitting expenditure incentive for small-scale landlords who undertake retrofitting work while the tenant remains in situ, since its introduction; and if he will make a statement on the matter. [25880/23]

Michael McGrath (Cork South Central, Fianna Fail)
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A new tax incentive was introduced in Finance Act 2022 for small-scale landlords who undertake retrofitting works while the tenant remains in situ, which has the aim of attracting and retaining small-scale landlords in the private rental sector. This measure is provided for in section 97B of the Taxes Consolidation Act 1997.

The provision is intended to provide for a deduction of certain retrofitting expenses incurred by landlords on rented residential properties in calculating their Case V rental profits. The expenses that qualify for deduction are those in respect of which the landlord has received a home energy grant from the Sustainable Energy Authority of Ireland (SEAI). It should be noted that the expenses incurred must be in respect of the period 1 January 2023 to 31 December 2025. Furthermore, the maximum amount of tax deduction that can be claimed is the lesser of the qualifying expenditure incurred or €10,000 and a landlord is only entitled to claim the relief on a maximum of two of his/her rental properties.

The deduction operates in the same manner as any other permitted rental deductions. However, unlike other rental expenses, it will not be deducted for the year in which it is incurred. Instead, the deduction will be claimed against the rental income of the year following that in which the expense was incurred. For example, expenses incurred on retrofitting works in 2023 should be included in calculating rental profits for 2024 and may be claimed by a landlord on their income tax return for that year. As such, relief under this measure will be claimed for the first time in 2025, in respect of the 2024 tax year.

Income tax returns for 2024 are not due until Q4 2025, and as such Revenue has advised me that it is not currently possible to provide information on the take-up of the deduction for retrofitting expenditure.