Q. I inherited a home a number of years ago. It has been rented to the same couple for the last five years. They were good tenants but recently left as one of them had a job change to County Tipperary. The rent they paid was quite low but I was happy with that. As I said they were good tenants, and they maintained the property and kept it in great order. If I were to get other tenants, I am not sure what type of increase I would be entitled to. The property is in a rural area. I am also thinking of selling up or maybe doing a short-term let for tourism as it might somewhat suit me as a holiday home. What are the matters I should be taking into consideration and looking out for?
Dear Reader,
The first thing step would be to confirm that your property is actually located in a Rent Pressure Zone (RPZ).
Rent Pressure Zones do not extend to many rural areas. If the property is located in an RPZ, then any potential rent increase, including any rent that you may charge to a new tenant, is capped and restricted by the rent paid by your previous tenants.
What rent increase you can now claim would depend on when you last increased rent, when the tenancy commenced, etc. The Residential Tenancies Board can provide assistance in determining your maximum allowable rent.
If your property is outside the Rent Pressure Zone, you are entitled to charge a ‘market rent’ and are not restricted by rents paid by your prior tenants.
It would be important that you take all relevant and necessary tax advice before making any final decision. If you do decide to sell, you should bring your title deeds to your solicitor now to determine whether any steps need be taken with regard to planning, LPT, or related matters.
You should also consider what Capital Gains Tax might be payable by you. Generally speaking, this would be 33 per cent of the difference between the value of the home at the date of inheritance and the price you might obtain for it.
Airbnb or some other similar short-term letting might well be attractive to you. However, it is important to note that if your property is in an RPZ, you will need to apply for planning permission and no property was granted permission for a short let in Limerick in all of last year.
If your property is outside an RPZ, you may still need to register with your local authority.
Legislation has been passed to cover formal registration of short term lets with Failte Ireland, but this legislation has not yet been brought into effect.
You should also note that if the property remains vacant, it will be liable for Vacant Home Tax. If a property is used for less than 30 days in a year (from October to October) you are liable to pay a multiple of your Local Property Tax rate (for 2025 the rate is seven times the LPT).
