Landlord tax when living abroad

aido79

In the next couple of months I will be renting my house out. I live abroad so realise my tenant or agent will have to take 20% out of the rent for tax. Can anyone tell me what I can claim back at the end of the year from this tax. The house will be rented for €700/month.

I have seen that I can claim for agent fee, house insurance, wear and tear, ptrb registration but am sure how all of this works. I don't have a mortgage on the house so won't be claiming for interest. Can I claim for full amounts e.g. if the agent fees are €70/month can I claim the full amount or just a percentage of it?

TIA

Bobby1984

Tenants are actually obliged to deduct 20% of the rent where the landlord is living abroad. However, if you have agent who is in the State to collect your rent, then there is no need for the tenant to with hold the 20% tax.
If the tenant does deduct 20% they must complete an R185 form showing the gross rent and the tax that they deducted. You would then be able to use this to obtain a credit for the amount withheld when you submit your tax return.

Wear and tear is claimed on assets purchased for the rental property at a rate of 12.5%. Expenditure such as PRTB registration, agent fees, insurance can be claimed 100% in the year that the expense is incurred. If the agent is solely appointed to manage your rental property, then you claim 100% of the cost.

aido79

Bobby1984 wrote: »

Tenants are actually obliged to deduct 20% of the rent where the landlord is living abroad. However, if you have agent who is in the State to collect your rent, then there is no need for the tenant to with hold the 20% tax.
If the tenant does deduct 20% they must complete an R185 form showing the gross rent and the tax that they deducted. You would then be able to use this to obtain a credit for the amount withheld when you submit your tax return.

Wear and tear is claimed on assets purchased for the rental property at a rate of 12.5%. Expenditure such as PRTB registration, agent fees, insurance can be claimed 100% in the year that the expense is incurred. If the agent is solely appointed to manage your rental property, then you claim 100% of the cost.

Thanks. This will be my only income in Ireland and I'm not resident and also unsure of how to do a tax return but I'm sure I can figure it out from the revenue website. If an agent for example charges 10% I.e. €700 for the year can I claim the full amount against the tax paid? If that is the case then my tax bill will be negligible when I include insurance, wear and tear, prtb etc.

Legend100

This may seem obvious but you'd be surprised how many clients over the years would think it is a like for like refund. You get tax relief on the expenses, i.e taking a 700 agency fee, assuming you are on the lower band, you will get 20% tax relief out of the 700 (140 against your tax bill).

The amount of times I would have people doing a rental tax return thinking "nothing to worry about for tax as if my tax bill is 1000 euro on the rent, I definitely had a 1000 euro of expenses to cover that (rather than the 5000 needed assuming the lower marginal rate an no unused tax credits)

Bobby1984

aido79 wrote: »

Thanks. This will be my only income in Ireland and I'm not resident and also unsure of how to do a tax return but I'm sure I can figure it out from the revenue website. If an agent for example charges 10% I.e. €700 for the year can I claim the full amount against the tax paid? If that is the case then my tax bill will be negligible when I include insurance, wear and tear, prtb etc.

You are getting into fairly tricky tax areas so the advice would be to see an accountant/tax adviser for this. They spend years studying these matters as it is not always as easy as looking up the Revenue website.

When you move abroad, you need to consider if you are resident or ordinarily resident for a tax year to see what income you need to return for tax. I would be use to dealing with tax returns but when it comes to matters such as this I pass it on to our tax department to ensure that I am treating the income correctly and to ensure that I am claiming the correct reliefs and deductions.

Just because you are not making a profit doesn't mean that you don't have to do an income tax return.

Arbiter of Good Taste

Bobby1984 wrote: »

You are getting into fairly tricky tax areas so the advice would be to see an accountant/tax adviser for this. They spend years studying these matters as it is not always as easy as looking up the Revenue website.

When you move abroad, you need to consider if you are resident or ordinarily resident for a tax year to see what income you need to return for tax. I would be use to dealing with tax returns but when it comes to matters such as this I pass it on to our tax department to ensure that I am treating the income correctly and to ensure that I am claiming the correct reliefs and deductions.

Just because you are not making a profit doesn't mean that you don't have to do an income tax return.

It's Irish source income so he doesn't need to be resident or ordinarily resident to be subject to Irish tax.

Best leave it to the tax experts.

Bobby1984

Arbiter of Good Taste wrote: »

It's Irish source income so he doesn't need to be resident or ordinarily resident to be subject to Irish tax.

Best leave it to the tax experts.

I presume he wont be living on fresh air when he is abroad and that he will be earning income. He will be liable to tax in Ireland on his worldwide income if he is deemed to be resident and ordinarily resident

aido79

Bobby1984 wrote: »

You are getting into fairly tricky tax areas so the advice would be to see an accountant/tax adviser for this. They spend years studying these matters as it is not always as easy as looking up the Revenue website.

When you move abroad, you need to consider if you are resident or ordinarily resident for a tax year to see what income you need to return for tax. I would be use to dealing with tax returns but when it comes to matters such as this I pass it on to our tax department to ensure that I am treating the income correctly and to ensure that I am claiming the correct reliefs and deductions.

Just because you are not making a profit doesn't mean that you don't have to do an income tax return.

I will be getting advice from an accountant but just thought I'd ask here first. I won't be ordinarily resident as I haven't lived in Ireland for the past 7 years so it will a little different in my case. Thanks.

Arbiter of Good Taste

Bobby1984 wrote: »

I presume he wont be living on fresh air when he is abroad and that he will be earning income. He will be liable to tax in Ireland on his worldwide income if he is deemed to be resident and ordinarily resident

Go back to your question and see where you you started talking about residence. I know he will be taxable on worldwide income if he's resident, seeing as I am practising tax for nearly 20 years. I pointed out that at the end of the day that is a moot point as he will be subject to Irish tax on Irish source income, regardless of residence status.