Im looking into renting my house while myself and my family move to australia next February. We have a prospective tenant who is a friend of the family and we would feel comfortable with them staying in the house and we think that they would really look after it.
I am trying to work out how cheap I could rent out the house to this person so that it is affordable for them and that my bills are also covered.
Im not too worried about making a profit on the house, I think having the piece of mind that the house is being looked after outweights any small profits that could be made.
We built the house in 2007 and moved in in March 2008 so from what I have read we will be exempt from Stamp duty clawback. Does this sound correct??
I know we will have to tell the revenue that we are no longer living in the state which will mean no more Mortgage Interest Relief so I have added that onto the amount we currently pay to get an idea of our monthly mortgage bill.
My calculations are as follows:
Mortgage will cost us €11629 a year (€929.12 a month * 12)
If we get €1200 rent a month we will have an income of €14400 a year.
The interest on our mortgage is roughly €6000 a year so this will mean we get 4500 deductable from the 14400 (4500 is 75% of the interest for the year)
This will leave €9900 that is the taxable amount.
So assuming my calculations so far are correct.... If we are not living in the state and will therefore not be receiving any income in the state does this mean that the tax rate we pay on the €9900 is at the lower rate of 20% because we wont earn enough to be in the higher bracket?
I appreciate your help with this....