Tax Liability on Rented Property

Jesper

I am living in Dublin City but hope to 'return' to Kilkenny City in the future. I am going to buy a house now (not impulse, the right house has become available) and rent it for a couple of years before I move home.

I will register as a landlord and declare it as income. I am on the higher rate of tax (self employed). I will need a mortgage.
Let us say I will get €610 month rent for the house = 12 x €610 = €7,320 tax per year. Do I need to declare €7,320 extra 'Income' at the end of the tax year and am I then liable for 52% tax on this? Is there any discounts/deductions I can apply?

Immy

Basically you have it right. You can deduct a portion of mortgage interest, any repairs and maintenance and any expense you incur in relation to the property. You could also claim a capital allowance for furniture.

You take the income minus the expenses and pay 52% on profit.

angeldelight

Any pre-letting expenses (prior to first letting) are disallowed

CIARAN_BOYLE

You can set aside 75% of the interest against income and any repairs insurance letting and other expenses

mozattack

Consider valuing fittings etc and aim wear and tear thereon but be realistic with value

Mr. Incognito

Read the guide to rental income in the stickies

Jesper

CIARAN_BOYLE wrote: »

You can set aside 75% of the interest against income and any repairs insurance letting and other expenses

For Example
Variable Mortgage over 15 years = €638.90 (5.15%).

Rent for a month is going to be around €610.

So what is 75% of interest in this case?

barneystinson

Jesper wrote: »

For Example
Variable Mortgage over 15 years = €638.90 (5.15%).

Rent for a month is going to be around €610.

So what is 75% of interest in this case?

Step 1: Get an annual interest statement for the mortgage.

Step 2: Read how much interest it says.

Step 3: multiply that figure by .75.