How to rent out my house?

chubbs2011

Hi all, im sure this thread has been posted before so sorry for repeating threads. Basically we want to rent out our house and move into a rental property nearer my husbands job. We would not get enough to cover the mortgage so we would have to make up the shortfall which is ok. We have our mortgage with halifax and out tracker will not be affected ( i have rang them today although they have to approve it). Am i right in thinking we will lose our TRS. Do we become landlords, do we have to pay tax even though we are not making any profit. What is the first thing we should do. Any advice welcome. I have no idea where to start

cork_south

chubbs2011 wrote: »

Hi all, im sure this thread has been posted before so sorry for repeating threads. Basically we want to rent out our house and move into a rental property nearer my husbands job. We would not get enough to cover the mortgage so we would have to make up the shortfall which is ok. We have our mortgage with halifax and out tracker will not be affected ( i have rang them today although they have to approve it). Am i right in thinking we will lose our TRS. Do we become landlords, do we have to pay tax even though we are not making any profit. What is the first thing we should do. Any advice welcome. I have no idea where to start

Yeah you will lose your TRS, but you will be able to claim back 75% of the mortgage interest.
You still have to pay tax, even though you are making a loss
This is a good link for you:
http://www.revenue.ie/en/tax/it/leaflets/it70.html

NIMAN

Also check out www.Irishlandlord.com,
some great info for 1st time LLs

quietsailor

1. I can't emphasise this enough; TAKE PHOTOS OF ABSOLUTELY EVERYTHING BEFORE THE TENANT MOVES IN AND GET THEM TO SIGN YOUR COPY. GIVE THEM A COPY

• Exterior walls, gardens, conditions of windows.
• Interior walls, floors/carpets/furniture.
• Kitchens - both the presses/fridges/washig machine etc - inside and out, put the crockery & pans on the counter and photo them is they are expensive.
• Bathrooms - the ondition of the shower, toilet, basin, the tiles/wall covering/floor covering.

This provides proof if there is ever an arguement about damage and dirt - possibly the biggest reason for "deposits being kept" that appears here.

2. De clutter the house, what you think makes it look homely is just more stuff to get broken and cause irritation between you and the tenant.

3. Register with the appropriate bodies; PRTB (once they are in), College accomodation office (if you are renting to students), NPPR (Non Principal Private Residence - €200 per year), Household charge - your going to be on the PRTB list anyway. I'm sure there are more but I can't think of them right now.

4. Check references- Ring the numbers, keep copies of anythingthey show you, log any calls you make to references so if it's a fals reference you can prove it.

5. Inspect the house regulary, ask if anything needs fixing as small problems can become expensive ones quickly e.g a loose washing machine door can get broken or worse again leak.

6. Start thinking about Utilities - are you going to supply the bins/sky/internet in your name and add that onto the rent (agreeing that before hand with the tenant first) or do you expect the tenant to get them installed?

7. Change the electricity and gas supplies over as soon as they move in. I think all you can do these days is close your own account. Make sure you take the meter readings with the tenant next to you, get them to initial the place where you write these readings (usually a space in the lease)

8. Make sure there is an appendix attached to the lease stating the contents of each room, the manufacturers and it's condition; eg Kitchen - 1 X Washing machine, Hoover xyz123 in good condtion.

9. I've started putting the deposits for my house in a seperate 21 day notice account - it costs you nothing and if there is ever an arguement about money it will make me look better as I haven't spent the deposit (legally it belongs to the tenant, your just holding it)

riclad

Y0u don,t pay tax if you make no profit, you still need to make a tax return stating all rental income recieved,The local council may charge you a tax,around 200 euros pa depending on what county you live in.

rcdk1

riclad wrote: »

Y0u don,t pay tax if you make no profit, you still need to make a tax return stating all rental income recieved,The local council may charge you a tax,around 200 euros pa depending on what county you live in.

Because you only get tax relief of 75% of the mortgage interest, it is a distinct possibility probability that you may will have to pay tax even if you don't make a net profit.

You will have to pay the yearly €200 NPPR (Non Principle Private Residence) charge even if you're living in a rental property yourself.


OP, being a landlord is a business and should be treated as such (even if you're being forced into it and you're renting out your family home).

You should get intimately aquainted with the Revenue website and in particular the Rental Income section:

cork_south wrote: »

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

Similarly, you should get acquainted with the main legislation in this area which is the 2004 Residential Tenancies Act http://www.irishstatutebook.ie/2004/en/act/pub/0027/index.html

The Act set up the PRTB (Private Residential Tenancies Board) which registers tenancies and mediates/adjudicates disputes. Again, you should get to acquainted with their website (even if it's badly made) http://public.prtb.ie/

Quietsailor gave good advise and as NIMAN said www.irishlandlord.com is a good resource. However, note that advise given on forums (including my own) carries no guarantees.

horsebox7

What perectage of tax does a landlord have to pay under the PAYE system? I am aware from landlord.com that Gross Rental Income- Allowable Expenses - Capital Allowances = Taxable Rental Income. But at what rate is this calculated? Does it depend at what rate you are earning at in your full time job plus your rental income if you are a PAYE worker?

Thanks

D3PO

depends on your other income. if your in the higher tax bracket then its the top rate if your in the lower then the amount that brings you to the threshold is at the lower.

consider it an extension of your salary basically. I dont know too many LL's not in the high tax bracket though tbh.

horsebox7

Thanks for that. Does anyone happen to know what the threshold is for the standard rate of tax and the higher rate? What are the rates for these thresholds? Had a look on revenue site but could see the details.

Thanks

relax carry on

horsebox7 wrote: »

Thanks for that. Does anyone happen to know what the threshold is for the standard rate of tax and the higher rate? What are the rates for these thresholds? Had a look on revenue site but could see the details.

Thanks

Work away.

http://www.revenue.ie/en/tax/it/leaflets/it1.html#section3

horsebox7

Thank you

Mrs OBumble

horsebox7 wrote: »

What perectage of tax does a landlord have to pay under the PAYE system? I am aware from landlord.com that Gross Rental Income- Allowable Expenses - Capital Allowances = Taxable Rental Income. But at what rate is this calculated? Does it depend at what rate you are earning at in your full time job plus your rental income if you are a PAYE worker?

Thanks

horsebox7 wrote: »

What perectage of tax does a landlord have to pay under the PAYE system? I am aware from landlord.com that Gross Rental Income- Allowable Expenses - Capital Allowances = Taxable Rental Income. But at what rate is this calculated? Does it depend at what rate you are earning at in your full time job plus your rental income if you are a PAYE worker?

Thanks

A landlord is not an employee, so does not pay the tax on their LL business through the PAYE system.

Instead, they register for Income Tax, complete a tax return each year, and pay Revenue the amount due directly.

Now if a LL is also a PAYE employee, then it is possible for them to make arrangements with Revenue to effectivey pay some extra tax (up to I think 42%) from their PAYE-taxed income, in order to reduce the amount that they still owe at the end of the year.

But either way, the rates are still the same no matter how you earn your income (with one small exception around the first 8k of PAYE income being largely tax-free).

horsebox7

Interesting. How is the first 8k tax free?

riclad

You Can claim for all expenses on the rental unit,
insurance,advertising, repairs, property tax,service charges,
IF is an apartment.
75 per cent mortgage interest,
1st jan to 31st of december is the tax year.
accountants fees,if you choose to have 1.
Say you buy a cooker ,you claim allowance for that over 8 ears.
cost 800 claim 100 per year.
You fill in a tax return, i think its tax form 12.
i helped a friend,fill it in 2 weeks ago.
See revenue.ie , search landlord .

relax carry on

horsebox7 wrote: »

Interesting. How is the first 8k tax free?

Its a combination of your standard rate band and personal tax credit of 1650 euro. In English multiply 1650 by 5 to give you 8250 free from PAYE or Income Tax.