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Tax on rental income

  • 09-01-2011 1:39am
    #1
    toothie
    Registered Users, Registered Users 2 Posts: 112 ✭✭


    Hi, just wondering if someone could help me out with a query.

    I purchased a house in April 2010 and rented it for 6 months out before moving in myself. Do I need to declare this rental income (around 4K) and if so, how do I go about it? Can it be declared online? What is the rate of tax likely to be?

    A lot of questions I know, but I can't find the information online.
    Thanks in advance.
    Tagged:


Comments

  • #2
    AugustusMinimus
    Registered Users, Registered Users 2 Posts: 4,564 ✭✭✭AugustusMinimus


    1. As you weren't living in the house when rented out, you will have to return this rental income for tax.

    2. I believe you can return rental income on PAYE Anytime which would be the easiest way.
    http://www.ros.ie/paye/launchPAYEanytime_en.html

    3. If you are already earning 32,800 (if you are single) then all the rental income will be taxable at 41%. Also add on 4% for PRSI and 7% for the new Universal Social Charge.

    4. If you have a mortgage, 75% of the interest is an allowable expense. In your case, it would be 75% x 6/8 x interest in 2010.

    5. As you had a person renting a residiential premesis off of you, you should have registered for the Residential Tenancies Board. Too late now I guess.


  • #3
    Victor
    Registered Users, Registered Users 2 Posts: 78,577 ✭✭✭✭Victor


    toothie wrote: »
    Hi, just wondering if someone could help me out with a query.

    I purchased a house in April 2010 and rented it for 6 months out before moving in myself. Do I need to declare this rental income (around 4K) and if so, how do I go about it? Can it be declared online? What is the rate of tax likely to be?

    A lot of questions I know, but I can't find the information online.
    Thanks in advance.
    You will need to declare it in a usual end of year tax return.

    You will only need to pay tax if you made a profit.

    If you were claiming TRS, this may cause complications and you would be advised to seek professional help.


  • #4
    MBateson
    Registered Users, Registered Users 2 Posts: 169 ✭✭MBateson


    Also, if you didn't register with the PRTB you can't claim your mortgage interest as an expense against your rental income.


  • #5
    3DataModem
    Registered Users, Registered Users 2 Posts: 4,077 ✭✭✭3DataModem


    Also, how much stamp duty did you pay?


  • #6
    toothie
    Registered Users, Registered Users 2 Posts: 112 ✭✭toothie


    Thanks for the advice everyone. I was a first time buyer, so I didn't pay stamp duty. The tenants were already living there when I bought the house, so I just allowed them to stay on for a six month contract.
    I didn't claim TRS, don't even know what this is.

    Thanks again, will get onto Revenue tomorrow and sort it out.


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  • #7
    3DataModem
    Registered Users, Registered Users 2 Posts: 4,077 ✭✭✭3DataModem


    Do you realise that by taking any rent at all within first two years of ownership you now have to retrospectively pay full whack stamp duty as if you were an investor when you bought it?


  • #8
    toothie
    Registered Users, Registered Users 2 Posts: 112 ✭✭toothie


    I was not aware of this 3datamodem and I wish someone had explained all this to me at the time. I did not buy as an investor, I fully intended to live there from day 1, however there were tenants. The agent should have advised me of all this at the time. I just want to sort it all out now. Thanks for your help.


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