Property
Irish Real Estate Funds (IREFs): the 20% withholding tax explained
Last updated 16 October 2026
Funds holding mainly Irish property are IREFs, and most non-resident investors suffer 20% withholding tax on distributions and redemptions. Who is exempt.
Irish investment funds generally pay no tax on their own income and gains; tax is collected from investors instead. That left Irish property profits going to some foreign investors untaxed. So Finance Act 2016 brought in the Irish Real Estate Fund (IREF) regime, in Chapter 1B of Part 27 of the Taxes Consolidation Act 1997.
What is an IREF?
An Irish investment undertaking, or a sub-fund of an umbrella fund, is an IREF if:
- 25% or more of the value of its assets comes from Irish real estate, or
- one of its main purposes is to acquire Irish property assets or carry on an Irish property business
IREF assets include Irish land and buildings, shares in property investment companies (REITs) and unquoted shares that get their value from Irish property. They also include certain property-backed loans and units in other IREFs.
The withholding tax
When an 'IREF taxable event' happens, the fund deducts 20% from the amount going to a unit holder who is a 'specified person'. Taxable events are any way the fund passes its property profits to investors, including:
- distributions
- redemptions, cancellations or repurchases of units, including on liquidation
- exchanging units between sub-funds, issuing bonus units, and the fund ceasing to be an IREF
- disposing of units, or of the right to accrued profits
| Distribution of property profits to a foreign investor | €5,000,000.00 |
| IREF withholding tax at 20% | (€1,000,000.00) |
| Paid to the investor | €4,000,000.00 |
Who is not taxed
Irish resident individuals and others who already pay the ordinary investment fund exit tax aren't also charged IREF tax. Some investors aren't charged either if they make a valid declaration to the fund. They include Irish pension funds, ARFs, PRSAs and PEPPs, Irish investment undertakings and life assurance companies, and charities. Credit unions, section 110 companies and their EU and European Economic Area equivalents are also covered. Investors in a personal portfolio IREF, where they can influence what the fund holds, face special rules.
Some indirect investors, such as pension schemes investing through another vehicle, can claim a refund of tax that wouldn't have arisen had they invested directly.
Fund obligations
Every IREF files an annual return and pays over the tax withheld. For years ending up to the previous 31 December, the date is 30 July. For years ending up to the previous 30 June, it is 30 January. The return is an Excel file submitted through MyEnquiries. IREFs also file financial statements electronically.
Work it out
Sources
- Revenue: How to calculate CGT (checked 25/10/2026)
General information, not tax advice. HeyPenny is not a tax agent.