tax for becoming a landlord

thebourke

I am currently employed in the PAYE sector and am currently renting at the moment.
I am thinking of maybe buying a property to rent out...what kind of tax are you charged for renting out properties...

jjbrien

Its 20% of the rent as far as i know

Skybox

You are charged tax on the rental profits. You are allowed to deduct a portion of mortgage interest and any other expenses associated with the property such as insurance, property management fees and letting costs such as advertising, etc. The tax charged is dependent on other income. If your PAYE income and rental income is over the cut off threshold, you will be taxed at 41%.

Citizenpain

Skybox wrote: »

You are charged tax on the rental profits. You are allowed to deduct a portion of mortgage interest and any other expenses associated with the property such as insurance, property management fees and letting costs such as advertising, etc. The tax charged is dependent on other income. If your PAYE income and rental income is over the cut off threshold, you will be taxed at 41%.

+ PRSI
+ USC

+ many many headaches

Geuze

thebourke wrote: »

I am currently employed in the PAYE sector and am currently renting at the moment.
I am thinking of maybe buying a property to rent out...what kind of tax are you charged for renting out properties...

There is no "special" income tax rate on rental income.

All income is added up, subject to reliefs/allowances, and taxed as usual.

There are two income tax rates in Ireland: 20% and 41%.

Bobby1984

If you are single and only have the basic tax credits you will pay the high rate of tax on all income over €32,800. This means that you will pay 41% Paye, 4% Prsi and 7% USC - total 52% on income. If you are renting a house out to someone for €600 pm you will earn €7,200 per annum. You can deduct mortgage interest from this (75% if you register with the PRTB) and other expenses of maintaining the house and the tax is calculated on the balance.

What you are much better off doing if the circumstances permit, is to buy a house for yourself and rent out a room/rooms. In this situation, you can earn up to €10,000 and not pay a cent of tax. I would definitely look this up if you havent already.

aerotuned

Bobby1984 wrote: »

If you are single and only have the basic tax credits you will pay the high rate of tax on all income over €32,800. This means that you will pay 41% Paye, 4% Prsi and 7% USC - total 52% on income. If you are renting a house out to someone for €600 pm you will earn €7,200 per annum. You can deduct mortgage interest from this (75% if you register with the PRTB) and other expenses of maintaining the house and the tax is calculated on the balance.

What you are much better off doing if the circumstances permit, is to buy a house for yourself and rent out a room/rooms. In this situation, you can earn up to €10,000 and not pay a cent of tax. I would definitely look this up if you havent already.

Hi. I'm in the same boat my my self at the moment, and if u rent out the whole house u loose any morgage relief you are receiving 2,? think the rent a room is way to go,
Can u rent to a family getting rent allounce ? And still claim to be the owner -occ,?

elroy45

If you rent the house you will loose the mortgage interest relief.

If you rent a room, you can keep the mortgage interest relief.

You can rent to a family getting rent allowance - the tax position is the same as renting to someone who pays you 100% of the rent themselves. You cannot claim to be owner occupier unless that is the case and it is your PPR.