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Moved out of Apartment as too small, tax bill??

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  • 09-01-2012 4:51pm
    #1
    cronins
    Closed Accounts Posts: 2 ✭


    Hi, any help is greatly appreciated.

    We moved out of our mortgaged apartment last Feb 2011.
    We have been renting it out ever since for 950 a month.
    Our mortgage is 1100.
    We moved out as it was too small, we have a couple of new additions.
    the place we are renting is 1400 a month.

    We are in 100k + negative equity!

    After searching the net i can't find any info on any Tax we may owe.

    Can anyone help?
    Tagged:


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    #2
    Alan Shore
    Registered Users Posts: 735 ✭✭✭Alan Shore


    1st Question, did you rent within 2 years of purchase, Stamp duty clawback if you did. If not ignore stamp duty.

    You have to account for Income Tax on your rental income less the interest x 75%.
    You should register the tenancy with PRTB €70 to get interest deduction. You need to pay NPPR.


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    #3
    TiGeR KiNgS
    Registered Users Posts: 1,435 ✭✭✭TiGeR KiNgS


    Make sure your not breaking the terms of the mortgage.
    People have been transferred from trackers to variable mortgages as they began renting the property out and ceasing the principal private residence initial arrangement.
    This could will cost you on increased interest payments.


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    #4
    relax carry on
    Registered Users Posts: 4,072 ✭✭✭relax carry on


    cronins wrote: »
    Hi, any help is greatly appreciated.

    We moved out of our mortgaged apartment last Feb 2011.
    We have been renting it out ever since for 950 a month.
    Our mortgage is 1100.
    We moved out as it was too small, we have a couple of new additions.
    the place we are renting is 1400 a month.

    We are in 100k + negative equity!

    After searching the net i can't find any info on any Tax we may owe.

    Can anyone help?

    You could try the Revenue website and the guide to rental income as its pretty comprehensive.

    http://www.revenue.ie/en/tax/it/leaflets/it70.html


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    #5
    cronins
    Closed Accounts Posts: 2 ✭cronins


    Thanks for all this guys. Much appreciated.
    I did inform the bank (UB) at the time that we were renting it out and they said it would have no impact on the mortagage.
    We are renting it out for less than the monthly mortgage so we are making a loss on it.
    I'm sure I'm very much not alone in this head recker of a problem.


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    #6
    [Deleted User]
    Posts: 23,339 ✭✭✭✭ [Deleted User]


    cronins wrote: »
    .........................
    We have been renting it out ever since for 950 a month.
    Our mortgage is 1100...................

    You'll be liable for income tax on the profit, profit is €950 - (expenses) per month, a percentage of the interest payment is an expense. Also you can't claim mortgage interest relief anymore, also must register the tenancy with the PRTB etc etc.

    Negative equity is not relevant really, neither is your new rent payment.

    In fairness, your tax liability may well not be huge but you must still document that and pay the balance.


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    #7
    relax carry on
    Registered Users Posts: 4,072 ✭✭✭relax carry on


    cronins wrote: »
    Thanks for all this guys. Much appreciated.
    I did inform the bank (UB) at the time that we were renting it out and they said it would have no impact on the mortagage.
    We are renting it out for less than the monthly mortgage so we are making a loss on it.
    I'm sure I'm very much not alone in this head recker of a problem.

    For taxation purposes, your loss or gain is not worked out deducting the full mortgage payment; it is 75% of the interest portion only. So for example, if your rental income was 9000 for the year and your interest was 5000 then you would be taxed on 9000 minus 3750. You would also not be able to use the interest as a deduction if you have not registered with the PRTB meaning you would be taxed on the full 9000.


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    #8
    billyknowsbest
    Registered Users Posts: 30 ✭billyknowsbest


    Hi all,
    We moved out of our house towards the end of 2013- and are now renting it out. We got a tax bill from revenue for 1,800 euros, a balancing statement for 2013. Here is the thing- the flat was rented for only four months of 2013- September to December at 950 a month. How can we be liable for 1,800 out of a total of 3,800??
    I am a paye worker and i think the revenue are adding my salary to my rental income to get the 1,800. Any ideas?


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    #9
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,294 CMod ✭✭✭✭Pawwed Rig


    billyknowsbest wrote: »
    Hi all,
    We moved out of our house towards the end of 2013- and are now renting it out. We got a tax bill from revenue for 1,800 euros, a balancing statement for 2013. Here is the thing- the flat was rented for only four months of 2013- September to December at 950 a month. How can we be liable for 1,800 out of a total of 3,800??
    I am a paye worker and i think the revenue are adding my salary to my rental income to get the 1,800. Any ideas?
    Did you file a return?


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    #10
    billyknowsbest
    Registered Users Posts: 30 ✭billyknowsbest


    Hi Pawn,
    Sure we filed a return- we were expecting a far smaller bill for 2013 as it was only four months- 2014 obviously will be bigger- have written to them and plan to phone them too


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    #11
    prettyrestless
    Registered Users Posts: 444 ✭✭prettyrestless


    Did you just put the income (950 x 4) in the return or did you include related expenses as well? Repairs, 75% mortgage interest, etc

    I'm guessing you didn't and are now paying tax @ 41% and usc @ 7% which would come to approx 1800.


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    #12
    billyknowsbest
    Registered Users Posts: 30 ✭billyknowsbest


    as far as i know I included interest- there were no repairs- what to do??


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    #13
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,294 CMod ✭✭✭✭Pawwed Rig


    As pretty restless says it sounds like you are being taxed on the whole amount. Maybe you forgot to tick the prtb box and your interest wasn't allowed. Are you registered with prtb?
    It could be any amount of reasons. Call them and they might be able to sort it for you.


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    #14
    billyknowsbest
    Registered Users Posts: 30 ✭billyknowsbest


    many thanks pawwed and pretty, will be phoning them- we re registered with prtb!


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