Tax on rental income

brianb10

I am paying income tax at the higher marginal rate and i am looking to rent my apartment.
If I get €750/month what tax would i be paying on this and what expenses can i write off against the tax to reduce it?
Thanks in advance

Bobby1984

As you are on the high rate of tax, you would be paying approx 50% tax (paye prsi and USC) on the rental income.

The main expense most people have is mortgage interest on a loan to buy the property. You can deduct 75% of the interest payments and any other rental expenses from the rental income received before multiplying by 50% to get the tax due.


See attached for more details:

http://www.revenue.ie/en/tax/it/rental-income.html

brianb10

Thanks Bobby.
Is this a correct calculation

Rent 750 x 12mths = €9,000

LESS
Mortgage interest (75% of €13,300) = €9975

Does that mean i have a rental loss and don't have to pay tax on the rental income?

Shane732

brianb10 wrote: »

Thanks Bobby.
Is this a correct calculation

Rent 750 x 12mths = €9,000

LESS
Mortgage interest (75% of €13,300) = €9975

Does that mean i have a rental loss and don't have to pay tax on the rental income?

In a word yes.

Bobby1984

You need to make sure that you have registered the tenancy with the PRTB. Otherwise none of the mortgage interest is allowed against the rental income.

Rent 750 x 12mths = €9,000

Taxed at 50% = €4,500

I do this to show you the importance of registering with the PRTB. I think its €100 but its €200 if you are back dating the tenancy.

Don't forget that even though you do not have to pay tax, you must still file a tax return. The good news is that the rental loss of €975 in your calculations would be available to carry forward and offset against rental profits next year

godtabh

Bobby1984 wrote: »

You need to make sure that you have registered the tenancy with the PRTB. Otherwise none of the mortgage interest is allowed against the rental income.

Rent 750 x 12mths = €9,000

Taxed at 50% = €4,500

I do this to show you the importance of registering with the PRTB. I think its €100 but its €200 if you are back dating the tenancy.

Don't forget that even though you do not have to pay tax, you must still file a tax return. The good news is that the rental loss of €975 in your calculations would be available to carry forward and offset against rental profits next year

You don't need to register with pRTB to make a tax return. That's separate. Unless you can prove otherwise

brianb10

If i rent my apartment and rent out a bigger house to live in is it possible to recieve 30% mortgage relief on my mortgage as well as claiming the mortgage interest as an expense on rental income?
Can you do both?

I think i messed up my calculation above.
The 13,300 was the total interest before 30% relief.
Am i right in saying
30% of 13,300 = 3990
therefore actual interest paid = 9310
75% of 9310 = 6982 which is the amount to take off the rental income as an expense?

Hope that makes sense and I'm not rambling too much!

barneystinson

godtabh wrote: »

You don't need to register with pRTB to make a tax return. That's separate. Unless you can prove otherwise

I think you've misunderstood what the prvious poster said - he's telling the OP that he has to file a tax return either way, but unless he's registered the tenancy with the PRTB then he cannot claim an interest expense against the rental income.

Unless you can prove otherwise... (saucer of milk!)