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Renting Property while travelling

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  • 20-05-2008 1:51pm
    #1
    JohnnyRoyal
    Registered Users Posts: 75 ✭✭


    Hi,

    I have an apartment at the moment which is my home residence and I'm getting mortgage relief on. I'm thinking of going travelling in the coming months and am looking to rent out the apartment but this raise a few questions if I rent out the apartment.
    1. Do I have to stop claiming Mortgage relief on this becasue I will no longer be living there??
    2.What if the person I'm renting to wants to claim rent relief on it can they claim this?
    3. Therefore is it possible to claim mortgage relif and rent relief on the same property?
    4. How do I go about canceling mortgage relief payments i this is necessary?
    5. The apartment is 3 years old, therefore with the new budget does clawback tax apply to me?

    thanking you in advance,

    JR.


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    #2
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,482 Mod ✭✭✭✭johnnyskeleton


    JohnnyRoyal wrote: »
    1. Do I have to stop claiming Mortgage relief on this becasue I will no longer be living there??

    I believe so. I also think there could be a stamp duty clawback if you benefitted from the first time buyer rate and purchased less than 5 years ago. Also you will have to register with the private residential tenancies board and there a lot of other tax and regulatory implications. You should speak to the revenue, an accountant or a property leasing company to get a better idea.
    JohnnyRoyal wrote: »
    2.What if the person I'm renting to wants to claim rent relief on it can they claim this?

    Probably, but it shouldn't make any difference to you if you intend to lease it legally and in compliance with all the regulations.
    JohnnyRoyal wrote: »
    3. Therefore is it possible to claim mortgage relif and rent relief on the same property?

    I suppose under the rent a room scheme it is, and also under the statutory schemes such as section 23 or section 50. But in normal circumstances I don't think so.
    JohnnyRoyal wrote: »
    4. How do I go about canceling mortgage relief payments i this is necessary?

    Speak to the revenue commissioners.
    JohnnyRoyal wrote: »
    5. The apartment is 3 years old, therefore with the new budget does clawback tax apply to me?

    I think so.

    For better answers, contact the revenue commissioners. By and large they are very friendly.


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    1. Do I have to stop claiming Mortgage relief on this becasue I will no longer be living there??

    Yes, you have to stop. Its done at source. You need to contact your mortgage providor and also the revenue commissioners to sort this out. Note: your mortgage rate may rise- as investment properties are viewed by lenders as a much greater risk than owner occuppied properties.
    2.What if the person I'm renting to wants to claim rent relief on it can they claim this?

    There is nothing whatsoever you can do to stop them. They can even claim relief retrospectively up to 4 years later. Make sure you do this above board- and then you'll have nothing whatsoever to worry about.
    3. Therefore is it possible to claim mortgage relif and rent relief on the same property?

    As Johnny above says- there are specific circumstances where it is possible. In your case its unlikely however (I don't know enough information to comment specifically).
    4. How do I go about canceling mortgage relief payments i this is necessary?

    Contact the Revenue Commissioners.
    5. The apartment is 3 years old, therefore with the new budget does clawback tax apply to me?

    Confirm with the Revenue Commissioners. Its my understanding that the 5 year rule was reduced to 2 years from last December for everyone- not just people going forward- but confirm this.

    Note: You will have to make a tax return declaring the income- but you will have a number of allowable expenses to deduct from the rental income before determination of your taxable income- including the entirety of the mortgage interest payments (which should cover the vast bulk of the income). Its tedious- but you will have to make sure all the paperwork is in order.


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