Rental Income question

Sheep Shagger

Apologies if this has been raised elsewhere.

Am considering renting out my property (in full not under the rent a room scheme).

Have looked at the Revenue website but can't seem to get my head around it, is there a way of calculating what tax I'd pay on any rental income income (am trying to work out if it is worth my while).

Many thanks.

maddogcollins

Hi Sheep,

The amount of tax depends on other income really. Rental income is liable to income tax. As a result you will pay either 20%/41% on the "profit".

As i am sure you are aware you will be allowed to claim some expenses against income. The main one here would be Mortgage interest (if the mortgage is on teh house being rented and registered with PRTB). A list is on revenue website.

The rate you pay will depend on other income (PAYE income etc..). If you are using your standard rate cut off (SRCOP)against this, your rental profit will be taxed at 41%.

If you are not however using your full SRCOP you may only be liable at 20%.

Hope that helps a bit.

You will also have to include levies etc..

jockey#1

It all depends what your other income is. If you are single and earn over €36,400 then you will pay 41% tax on any rental profit + PRSI + income levy.

Jockey

jockey#1

jockey#1 wrote: »

It all depends what your other income is. If you are single and earn over €36,400 then you will pay 41% tax on any rental profit + PRSI + income levy.

Jockey

PRSI on rental income ? Really ?

jockey#1

RoverJames wrote: »

PRSI on rental income ? Really ?

Health levy is what I meant, sorry for any confusion!

Sheep Shagger

ah OK thanks, I thought as much (41% plus the various levies excl PRSI)


Dumb question, when you say 'rental profit' I take it you mean the actual amount of rent being received? or is it the total rent received less any expenses (mortgage interest/the usual stuff allowed by Revenue)?

maddogcollins

Sheep Shagger wrote: »

ah OK thanks, I thought as much (41% plus the various levies excl PRSI)


Dumb question, when you say 'rental profit' I take it you mean the actual amount of rent being received? or is it the total rent received less any expenses (mortgage interest/the usual stuff allowed by Revenue)?

Rental Profit= Rental Income - Allowable expenses

Sheep Shagger

Crystal clear - Thanks, need to crunch some numbers.

Alan Shore

RoverJames,
Does the exemption from PRSI only apply to Class A contributors who have investment income? Would a Class S contributor be subject to PRSI on rental income.

Citizenpain

Yes, , Class S pays PRSI on rental income, dividends etc

kennyb3

Surprised no body has said it but only 75% of mortgage interest is allowable as a case v expense from 7/4/09 - be careful.

bigschwee

What about if the rented property is jointly owned (e.g. husband & wife) and the two parties pay different PRSI classes? Which PRSI rate is used to calculate the amount due on rental income? Thanks!

Citizenpain

half & half--- i'd say from next year class A will be paying PRSI as well

J.Ryan

Also you would lose the entitlement to TRS on your mortgage interest.

Mr. Incognito

Read the guide to rental income in the stickies