improvements on rented house

danger_mouse_tm

Hi,

I will be renting my house out soon and I am in the process of getting everything in order (PRTB, tax registration etc). I was about to take up the carpet and replace it with laminate wood flooring. Rather than buy cheap wood myself and pay a handyman cash to put it down, a friend suggested that I just get a company in to supply and fit the flooring and the total bill (even though it will probably be more expensive than the first option) can be offset against my pay and file (form 11) taxes next October. Can that be confirmed?

Howjoe1

danger_mouse_tm wrote: »

Hi,

I will be renting my house out soon and I am in the process of getting everything in order (PRTB, tax registration etc). I was about to take up the carpet and replace it with laminate wood flooring. Rather than buy cheap wood myself and pay a handyman cash to put it down, a friend suggested that I just get a company in to supply and fit the flooring and the total bill (even though it will probably be more expensive than the first option) can be offset against my pay and file (form 11) taxes next October. Can that be confirmed?

A lot of points to consider.

Pre letting expenses (with the exception of letting fees, advertising fees, legal fees) are not deductible.

The tax treatment of the two scenarios you outlined, would be the same regardless of which option, assuming you also get a receipt for buying the wood and from the handyman, if incurred during a normal letting period in principle.

With such costs you have to distinguish between what is an "expense" and what is a "capital" item. Typical example, a window is broke, you replace the glass, that is a deductible expense. Or, you decide to upgrade from single glazed to double glazed windows, then that is an improvement of a capital nature and the cost can only be written off as a wear & tear allowance over 8 years. e.g. say the double glazed window cost €1,600 , then you can get claim a W&T allowance of €200 for the next 8 years rather than get a ful write off year 1.

Short answer, going the cheaper option is just as allowable provided you have receipts. If it is a pre-letting repair expense, then you cant claim either way.
But replacing carpets with new wooden flooring,could allow for W&T allowance as part of inventory. You can include all furniture and appliances and write off value over 8 years.

danger_mouse_tm

Would I be right in saying that if I were to buy the timber today (before letting commences) then I may not be able to claim the cost of that back and if I were to get a handyman in to lay the floor would he have to be registered as a business to give me a receipt?

Howjoe1

danger_mouse_tm wrote: »

Would I be right in saying that if I were to buy the timber today (before letting commences) then I may not be able to claim the cost of that back and if I were to get a handyman in to lay the floor would he have to be registered as a business to give me a receipt?

Buy the timber in the period of the first let. It's not your responsibility to ensure the tradesman is registered, you just need him to give you a receipt as proof of payment.

It would be worth your while downloading and reading this leaflet.

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

Glen Malure

Budget extended Home Renovations Incentive to landlords/let properties from 15/10/14. See about HRI on the Revenue website. Information seems a bit sparse at the moment.