tax on rental income

sazza

Hi Guys,

I am currently renting a house in dublin but thinking of buying a house as an investment and have a few questions i hope you can help me with

I will have a mortage of 920 per month and a rental income of 600 per month

To rent the house i have been told i will have to register as self employed so that that income can be taxed.

Do you know approx how much tax i will end up paying - how much tax would be written off against my mortgage interest ?

Thanks in advance for any assistance,
Sarah

TheScriptFan

Hi Sarah,

With an investment property you will be liable to:
income tax on rental income - at the marginal rate
Stamp duty on the purchase price (if property over €125,000)
Capital gains tax (when you sell the property)

You can claim mortgage interest relief - and offset this against your rental income - however you MUST register with the PRTB in order to qualify.

There are other expenses you can also offset - some repairs/maintenance, also capital allowances on furniture etc over 8 years.

You will need to make a return under the self assessment scheme - which is very simple to use.

Hope this helps!

Clanket

Also, should note that only 75% of the mortgage interest can be written off against the rental income.

sazza

ok thanks guys - so to get a accurate view i need to find out how much of my mortgage each month is going to be interest

TheScriptFan

Hi Sarah,

Yes that's correct. There are conditions for a tracker mortgage which would limit your options - but in reality, you're not going to get a tracker mortgage these days. You may indeed find it difficult to get a 'buy to let' mortgage, given EBS's announcement today.

As with anything formal - please do not rely on the advice you get from Irish boards, while most posting are very helpful & informative, when it comes to tax matters you would be most foolish to rely on anonymous posts.

I would take a look at www.irishlandlords.com to get a good idea of what renting out a property involves.

Good luck!

sazza

thanks ScriptFan - thats a very helpful site - has a tax calculator on it - tell me what i should expect

Appreciate your help

luapenak

Will you be living in the house? Will it be your principal residence?
If so..
You can rent a room in the house and once the rental income is less than 10k p.a. it is exempt from tax.