Tax on rental income

Twoandahalfmen

How much tax do you pay on your rental income l. And what other charges are there
Thanks

relax carry on

Twoandahalfmen wrote: »

How much tax do you pay on your rental income l. And what other charges are there
Thanks

As with pretty much everything in tax, it depends. Link below explains the taxation side of things.

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

Twoandahalfmen

relax carry on wrote: »

As with pretty much everything in tax, it depends. Link below explains the taxation side of things.

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

Can people just tell me - hate links

Kristopherus

Twoandahalfmen wrote: »

Can people just tell me - hate links

You mean you are lazy:D. Your question is as relevant as "How long is a piece of string?" In a nutshell , until details of your & partners income are known no one can say what the tax oin rental income is. All anyone can tell you now is that the tax will be at either 20% or 41%. You may also have to factor USC and from this year PRSI.

Twoandahalfmen

Kristopherus wrote: »

You mean you are lazy:D. Your question is as relevant as "How long is a piece of string?" In a nutshell , until details of your & partners income are known no one can say what the tax oin rental income is. All anyone can tell you now is that the tax will be at either 20% or 41%. You may also have to factor USC and from this year PRSI.

So you just calqulate it ass an add on to your wage like say you earn 35000 and rent is 24000

and you standard rate cut off point is 34000

you tax 34000 at 20%
and 25000 at 41 %

NIMAN

Minus any deductions or allowances you can write off, such as landlord insurance, maintenance charges, wear and tear, 75& of your mortgage interest etc.

Check out www.irishlandlord.com for more info.

SuperTina

Just researching this myself at the moment, so so far I've worked out:

Yearly charges:
Property Tax
Refuse Collection (in the future probably also water charges)
House Insurance
Registration with PRTB (once off fee of 90 Euro)
NPPR Fee of 200 Euro (this finishes in 2014)
Any potential repair work/maintainance
If appartment, then management fee

Deductibles from gross rental income for tax purposes:
Refuse Collection, gas, electricity, water, cable TV (if you pay for this rather than the tennant)
Insurance
Property repair work (not done by yourself)
Letting agent fees (not done by yourself)
Accounting work (not done by yourself)
Wear and tear = 12.5% of furnishings etc over 8 years
Management fees
Property tax - maybe, this is still uncertain
tax relief on 75% of mortgage interest accrued per year

Tax due:
Gross rental income - minus all of the deductibles then taxable at the applicable rate either 20 or 41% tax, plus 4% PRSI and 7% USC

As I am new to this myself, please note that I may have some errors in this, so probably best to get other people's comments also. Might have forgotten something here or there also! But I hope it'll give some sort of an idea to begin with....

emmetfahy

Property tax cannot be deducted as far as I know.
The USC I think is applicable from 2014?

riclad

I, M curious ,say rental income is 12k, 75 per cent of mortgage interest is 14k,
CAN the extra 2k interest,left over be used as a tax credit, allowance
in regard to say your regular income of 34k.
OR is it only allowable against rental income?
eg say you are working in an office ,earning 34k per year.
Theres alot of people out there ,whose mortgage interest ,75 per cent part,
is larger than the rental income they recieve.

Sand Wedge

riclad wrote: »

I, M curious ,say rental income is 12k, 75 per cent of mortgage interest is 14k,
CAN the extra 2k interest,left over be used as a tax credit, allowance
in regard to say your regular income of 34k.
OR is it only allowable against rental income?
eg say you are working in an office ,earning 34k per year.
Theres alot of people out there ,whose mortgage interest ,75 per cent part,
is larger than the rental income they recieve.

No rental losses can only go against future rental profits.
It would likely only be the landlords who do not have a tracker mortgage that 75% of mortgage interest would be greater than rental income. It is only the mortgage interest that is deductable not the full mortgage repayment.

riclad

I know a landlord ,mortgage 150k, rental income 450 per month,
I think the mortgage interest even 75 per cent, would be higher than
the total rental income per year.
The unit is in negative equity ,eg probably worth 80k at the comment.
UNIT was bought in 2007.
IT,ll be 20 years from now before there,s even 1 euro profit on this btl unit.

SO what you are saying is,75 per cent of mortgage interest is only allowable against
RENTAL income,
no part of it can be used as a tax credit ,in regard to landlords income,from say working in a shop,or other company.
I don,t think the landlord even knows what a tracker mortgage is,to be frank,
this landlord is not exactly a financial expert.
The first ten years, of the mortgage ,most of the payments ,are interest payments.

emmetfahy

Only 75% of the interest can be deducted. The other 1/4 and the principle is paid by you.

riclad

if your rental income is 7k, and mortgage interest is 16k, that 75 percent tax credit maybe not used,Since your profit/ taxable rental income, is tiny,
or even close to zero.
What i,m asking is is it possible to use part of the 75 per cent tax credit on loan interest, as a tax credit, against your NON rental income.
eg btl landlord whos working in a factory or company.

OR can it only be used in regard to rental income.

IF your rental income is low it may not be possible to use MOST OF the 75 per cent tax credit, on loan interest.

ie Because the tax allowable expenses,eg insurance,etc is much larger than the rental income.

Grolschevik

Riclad,

It's pretty hard to tell, because for whatever reason, your posts are borderline indecipherable, but from what I can make out, I'm pretty sure that your interpretation of the taxation of rental income is completely wrong.

riclad

You must be a mindreader, cos i,ve just posted a question ,re ,mortgage interest tax credits,deductions , and whether it applys to a landlords other income.
Super Tina has given a very good summary of taxation on rental income, and the various expenses ,and allowable deductions , with which i agree with 100 per cent.

From looking on revenue.ie ,i think it can only be used in reference to rental income.

murphaph

riclad wrote: »

What i,m asking is is it possible to use part of the 75 per cent tax credit on loan interest, as a tax credit, against your NON rental income.
eg btl landlord whos working in a factory or company..

No, because the two income types are filed under different schedules on the tax return. One can't be offset against the other.