Rental Q's

cosmowillie53

Hi folks.
My niece bought a house two & half yrs ago. She is finding it a bit of a struggle with mortgage of about € 930 per month.
She is about 27/28 and in full time employment earning approx €33k a year.
She intends to rent out her house in about a months time and move back to parents for a year or so.
She has a client lined up now who will be paying €900 rent p/m
She will need to put in a few pieces of new furniture before she rents.
I want to make sure she does everything correct from the very beginning.

Can anyone outline the order she should do things now to be fully legal..

What would her tax bill be given the above figures.
Thanks in advance.

cosmowillie53

cosmowillie53 wrote: »

Hi folks.
My niece bought a house two & half yrs ago. She is finding it a bit of a struggle with mortgage of about € 930 per month.
She is about 27/28 and in full time employment earning approx €33k a year.
She intends to rent out her house in about a months time and move back to parents for a year or so.
She has a client lined up now who will be paying €900 rent p/m
She will need to put in a few pieces of new furniture before she rents.
I want to make sure she does everything correct from the very beginning.

Can anyone outline the order she should do things now to be fully legal..

What would her tax bill be given the above figures.
Thanks in advance.

Any Ideas !!

tagfan

She'd be better off staying put and renting a room as she will be hit with a lot of costs from renting the whole place out.

Inform the bank they might put her on a different rate.
Advertise
Find tenants, register with PRTB
Pay second home charge
Pay household charge
She will pay a fair amount of tax as well on the rental income not to mention maintenance costs.

cookie1977

Tax on rent can be somewhat offest by the annual mortgage interest she's paying and other costs such as wear and tear, decorating, new things she buys for the place etc... So if her interest payments are high then the tax could be negligible.

She'll need to change her insurance policy on her home to a rental status. The insurance then will notify her bank as they have an interest in it and as tag said, if she has a preferential interest rate she may loose it (depending on her mortgage T&C's).

cookie1977

She'd also lose mortgage interest relief (TRS) but 75% of the mortgage interest is currently an allowable cost so she'll get something albeit a lot less then what she is possibly getting now.

kimberworth

She will need to contact the insurance company to change cover to landlord cover - essential she has public liability insurance incase tenant has accident in house and tries to claim against your niece for damages.

cosmowillie53

Thanks for the advice above folks.

riclad

UNDER the rent a room scheme,first ten k rent tax free,would it not be simpler to rent one room, say 80 euro per week.
to a female nurse, office clerk, rather than rent out the whole house.
thats 320 off mortgage, she still stays on same interest rate and gets
mortgage trs credits, 100 per cent.
I,M presuming shes living dublin,or somewhere with good rental demand.
ALL she,d have to do is get rent book, fill in one form for tax.
showing rent earned per tax year.rent a room, not required to register with
prtb.

3DataModem

I agree with above poster. Renting a room is a lot more cost effective. If interest on mortgage is say 650, then tax bill could be about 200 per month, plus other costs mean with option 1 (move out) she's paying out 300-400 per month net and renting elsewhere, with option 2 (rent a room) she is paying about 600 per month net and living in current place with tenant.