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Taxation on Rental Income

  • 10-01-2012 3:06pm
    #1
    CiaranMcDCFC
    Registered Users, Registered Users 2 Posts: 94 ✭✭


    Hi there, I am sure this has probably be asked previously but I am unable to find a thread. If there is one please delete this one and point me in the right direction.
    My query is basic. If I were to rent out my apartment and move out and rent somehwere else myself would I be liable to tax if the rent I was receiving was only covering the mortgage i.e. I would not be making a profit on it?


Comments

  • #2
    smeharg
    Registered Users, Registered Users 2 Posts: 300 ✭✭smeharg


    You didn't look too far - you'll find this a few posts below yours!

    http://www.boards.ie/vbulletin/showthread.php?t=2056509629


  • #3
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,113 ✭✭✭relax carry on


    CiaranMcDCFC wrote: »
    Hi there, I am sure this has probably be asked previously but I am unable to find a thread. If there is one please delete this one and point me in the right direction.
    My query is basic. If I were to rent out my apartment and move out and rent somehwere else myself would I be liable to tax if the rent I was receiving was only covering the mortgage i.e. I would not be making a profit on it?

    It's a common mistake to think that just because your rental income does not cover your mortgage that you are tax exempt. I posted the below earlier today in another thread further down the taxation section. Sorry can't figure out how to link threads on my HTC.

    "For taxation purposes, your loss or gain is not worked out deducting the full mortgage payment; it is 75% of the interest portion only. So for example, if your rental income was 9000 for the year and your interest was 5000 then you would be taxed on 9000 minus 3750. You would also not be able to use the interest as a deduction if you have not registered with the PRTB meaning you would be taxed on the full 9000"


  • #4
    theg81der
    Closed Accounts Posts: 1,644 ✭✭✭theg81der


    What happens if you don`t have a morgage? We have a 2 bed but I`m expecting and it looks like we will have to move. We can`t and wouldn`t get a morgage so we can rent our property and rent something more suitable. We`ll be paying about an extra 200 a month where does this leave us?


  • #5
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,113 ✭✭✭relax carry on


    theg81der wrote: »
    What happens if you don`t have a morgage? We have a 2 bed but I`m expecting and it looks like we will have to move. We can`t and wouldn`t get a morgage so we can rent our property and rent something more suitable. We`ll be paying about an extra 200 a month where does this leave us?

    You will be taxed on the full rental income minus expenses minus capital allowances.

    Example. 9000 rental income for the year minus 1500 expenses minus capital allowances of 500 equals 7000 taxable income.


    http://www.revenue.ie/en/tax/it/leaflets/it70.html#section5


  • #6
    theg81der
    Closed Accounts Posts: 1,644 ✭✭✭theg81der


    So no I can`t do this then - what the hell am I suppose to do?! Bet lots of people are in this position.


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  • #7
    smeharg
    Registered Users, Registered Users 2 Posts: 300 ✭✭smeharg


    theg81der wrote: »
    So no I can`t do this then - what the hell am I suppose to do?! Bet lots of people are in this position.

    This seems to be getting more and more common. The poster in the thread linked above is in a similar postition.

    Don't forget you'll also be liable for the NPPR and the Household Charge - a total of €300 per annum.

    The NPPR is particularly difficult to accept, but you're caught if you've got a residential property and it's not your principle residence.


  • #8
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,113 ✭✭✭relax carry on


    smeharg wrote: »
    theg81der wrote: »
    So no I can`t do this then - what the hell am I suppose to do?! Bet lots of people are in this position.

    This seems to be getting more and more common. The poster in the thread linked above is in a similar postition.

    Don't forget you'll also be liable for the NPPR and the Household Charge - a total of €300 per annum.

    The NPPR is particularly difficult to accept, but you're caught if you've got a residential property and it's not your principle residence.

    Also the PRTB charge of 90 Euro per tenancy.


  • #9
    theg81der
    Closed Accounts Posts: 1,644 ✭✭✭theg81der


    Thats just nonsensical I`m going to be 200 down. I can`t get a morgage neither of us is working. Silly me working 2 jobs to pay my morgage off early ffs I don`t know why I bother :rolleyes:.

    Have to move because we are hoping to foster kids (you need a spare room) and my step daughter won`t stay in this house we`re in. I`m pregnant and want her around more so she can bond with her sibling.

    How on earth am I going to find a way around this!:(


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