If you have bought, built, extended or refurbished commercial property, part of what you paid is likely to be plant and machinery hidden in the building: heating, electrics, lifts, alarms and sanitary ware. These embedded items qualify for capital allowances of 12.5% a year over eight years, but often go unclaimed. A capital allowance audit finds them and puts a value on them.
Information checked 3 October 2026 against Revenue and CRO guidance.
What's included
Capital allowances are the tax relief for money spent on business assets. You cannot deduct the cost of a building, machine or fit-out as an ordinary expense, so the tax rules spread the relief over several years instead. Allowances are generally calculated on the net cost of the asset, after deducting any grant towards it.
| Type of spending | Allowance |
|---|---|
| Plant and machinery, including embedded fixtures | 12.5% a year over 8 years |
| Industrial buildings (most) | 4% a year over 25 years |
| Energy-efficient equipment on the SEAI list | 100% in the first year, to 31 December 2030 |
| Building used as a creche or gym for employees | 15% a year for 6 years, then 10% in year 7 |
| Business cars | 12.5% over 8 years on a cost of up to €24,000, depending on emissions |
When you buy or build a commercial property, the price includes items that are plant and machinery in their own right, even though they are built into the fabric of the building. Typical examples are heating and air conditioning, electrical installations, security systems, fire and smoke alarms, lifts, emergency lighting and sanitary ware. They qualify for allowances at 12.5% a year even where the building itself does not qualify.
They often go unclaimed because the purchase price or the builder's final account does not split them out. Identifying and valuing them is specialist work that sits outside a routine tax return, which is why a separate audit is needed.
Read more: how to reduce your tax with embedded capital allowances.
Worked example
A business spends €1,000,000 developing a commercial building, and a survey finds €300,000 of embedded plant and machinery. That gives allowances of €37,500 a year for eight years.
| Owner | Tax rate | Saving a year | Over 8 years |
|---|---|---|---|
| Trading company | 12.5% Corporation Tax | €4,688 | €37,500 |
| Company letting the building | 25% Corporation Tax on rental income | €9,375 | €75,000 |
| Sole trader on the higher rate | 40% Income Tax | €15,000 | €120,000 |
The €300,000 figure is for illustration; the real share depends on the building and is set by the survey. A sole trader's saving is shown before any effect on USC and PRSI.
Yes. Finance Act 2025 extended the accelerated capital allowance scheme to 31 December 2030 (Revenue eBrief 028/26). Companies and unincorporated businesses can claim 100% of the cost in the year the equipment is first used, if it is new, on the list kept by the Sustainable Energy Authority of Ireland (SEAI) and above a minimum spend for its class, such as €1,000 for motors and drives or €3,000 for lighting. Equipment that runs on fossil fuel has not qualified since 1 January 2022.
Often, yes. Allowances you are entitled to can be claimed in current and future returns, and Revenue can repay tax overpaid in the last four years. Claims for 2022, for example, must be made by 31 December 2026. If you have no tax bill now, unused allowances can usually be carried forward and set against future profits.
Yes. The fixtures in a building affect what the buyer can claim, so a documented claim can add to its value when you sell, and a claim on a recent purchase reduces the real cost of the building to you. Agree how the price is split before contracts are signed.
Items that do a job in the business rather than simply forming the building: heating, electrical and security systems, fire and smoke alarms, lifts, emergency lighting and sanitary ware are typical examples. They qualify for wear and tear allowances of 12.5% a year over eight years.
Source: Revenue: Capital allowances and deductions, checked 3 October 2026.
Yes. The scheme was extended to 31 December 2030. Qualifying equipment on the SEAI list gets a 100% allowance in the year it is first used in the business.
Source: Revenue Tax and Duty Manual Part 09-02-04: Accelerated capital allowances for energy-efficient equipment, checked 3 October 2026.
Four years. Revenue can only repay tax for the last four years, so claims for 2022 must be made by 31 December 2026.
Source: Revenue: Four year rule, checked 3 October 2026.
Yes. Allowances are calculated on the net cost of the asset, so any grant received towards it is deducted first.
Source: Revenue: Capital allowances and deductions, checked 3 October 2026.
Possibly. A tenant who pays for a fit-out, such as heating, electrics or fixtures, may be able to claim allowances on that spending. Book a call and bring the fit-out invoices.
Next step
Contact us as soon as possible to see whether a claim would suit your premises, before the chance to claim is lost.
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