Are holiday homes residential or commercial properties for tax purposes?

In Ireland, holiday homes are generally treated as residential properties for tax purposes, including Local Property Tax (LPT), Capital Gains Tax (CGT), and rental income taxation.

• LPT: Holiday homes are subject to LPT unless part of a business, like an apart-hotel, which may qualify for an exemption.
• Rental Income: Typically taxed as residential property income (Case V). If operated as part of a business (e.g., guesthouses), it’s taxed as trading income (Case I).
• CGT: Holiday homes are treated as residential properties for CGT, with standard rates applying.
• VAT: Short-term letting may be subject to VAT (9%) if the property is registered.
• Commercial Rates: Only applicable if the property is part of a business subject to commercial rates.

Key distinction: The use of the property determines if it’s treated as residential or commercial for tax purposes.