Moving abroad (possibly) renting out house

oxygen

Hi

I got offered a job abroad I am thinking of taking it, but first I need to find out the feasibility of renting out my house. I'm really clueless on this,but do I have bright correct?

per month the mortgage cost me e650.
I know I could possibly get e500 rent per month for the entire house.

am I obliged to pay %52 tax on that 500? Leaving me with a net loss of close to 400 per month...

Eldarion

oxygen_temp wrote: »

Hi

I got offered a job abroad I am thinking of taking it, but first I need to find out the feasibility of renting out my house. I'm really clueless on this,but do I have bright correct?

per month the mortgage cost me e650.
I know I could possibly get e500 rent per month for the entire house.

am I obliged to pay %52 tax on that 500? Leaving me with a net loss of close to 400 per month...

You can offset the interest portion of the mortgage repayments against the tax. Along with the following:

• Management fees
• Advertising expenses
• Estate agent fees
• Insurance premiums
• Legal fees for drawing up leases
• PRTB registration fee
• Mortgage protection policy premium
• Accountants fees for preparing rental accounts
• Refuse and other service charges – if paid by you
• Cost of repairs and maintenance – this covers repairs and general maintenance of a property, however it is not possible to claim for your own time, for example, cutting the grass
• Wear and Tear

Take a trip over to Irish Landlord for more information.

CiboC

Be aware that your tenant will be obliged to pay 20% of the rent to Revenue which will be taken into account when you do your tax return for the rental income.

You will have allowances and reliefs to offset against the rental income.

You will loose any mortgage tax relief you currently have as an owner occupier.

Mrs OBumble

It will only by 52% (now 51%, actually) on income (most likely wages + (rental revenue minus allowable expenses) ) in the Republic that is over 35k. Lower rates below that, and the first 7k or so is tax-free. If you are working abroad, you most likely will not be tax resident here, so won't have to declare your wages from abroad here.

If you don't have a local agent managing it for you, then your tenant is required to pay 20% of the rental to Revenue on your behalf. I would strongly recommend having a local agent, so there is someone in the country to fix things that go wrong.

Also, you need to factor in the cost of insurance - talk to your insurance company about the cost of landlord insurnace, and also the cost (availability of cover, even) if you leave it empty.

sunnysoutheast

Eldarion wrote: »

You can offset the interest portion of the mortgage repayments against the tax. Along with the following:

• Management fees
• Advertising expenses
• Estate agent fees
• Insurance premiums
• Legal fees for drawing up leases
• PRTB registration fee
• Mortgage protection policy premium
• Accountants fees for preparing rental accounts
• Refuse and other service charges – if paid by you
• Cost of repairs and maintenance – this covers repairs and general maintenance of a property, however it is not possible to claim for your own time, for example, cutting the grass
• Wear and Tear

Take a trip over to Irish Landlord for more information.

Good list.

Only 75% of the mortgage interest, though

..also note that LPT is not deductible, despite promises :mad:

..and God only knows what's happening with the water charges :rolleyes::mad::eek:

sunnysoutheast

Mrs OBumble wrote: »

It will only by 52% (now 51%, actually) on income (most likely wages + (rental revenue minus allowable expenses) ) in the Republic that is over 35k. Lower rates below that, and the first 7k or so is tax-free. If you are working abroad, you most likely will not be tax resident here, so won't have to declare your wages from abroad here.

If you don't have a local agent managing it for you, then your tenant is required to pay 20% of the rental to Revenue on your behalf. I would strongly recommend having a local agent, so there is someone in the country to fix things that go wrong.

Also, you need to factor in the cost of insurance - talk to your insurance company about the cost of landlord insurnace, and also the cost (availability of cover, even) if you leave it empty.

Second the local collection agent. Would be insane relying on a tenant to make the return when the other option is....just keep the money.

However, it is not definite that the OP's tax position would be so clear-cut. If they have been in IE all of 2014 and so far in 2015 they would still be resident for 2015 under the 2 year rule, for example, in which case if IE-domiciled they are taxable in Ireland on their worldwide income whether remitted or not. The exemption for employment income when ordinarily resident is only valid if no part of the work is carried out in Ireland etc. etc. This is a very complex area!

NIMAN

.... or you could do what a few landlords do and take cash in hand and say nothing to Revenue.

Not recommended, but I know a few who do it.

The_Morrigan

NIMAN wrote: »

.... or you could do what a few landlords do and take cash in hand and say nothing to Revenue.

Not recommended, but I know a few who do it.

We will have no illegal advice given on this forum, thanks.

Whether you recommend it or not, the fact that you bothered to post it implies you advocate it.

lcwill

I live overseas and rent out my place in Ireland. As long as you take up tax residency abroad you should only be taxed in ireland on the "profits" from renting the house - i.e rent minus deductables and allowances - and this should be at 20%.

Deductions include service charges, letting and management fees, accountancy fees, repairs and 75% of mortgage interest and you get allowances for fixtures and furnishings which can be deducted over 8 years at 12.5% per year.

Technically you are supposed to nominate a collection agent to collect the rent and pay the 20% for you but most people in our situation just get the rent paid directly to them into an irish bank account and have an accountant file a tax return every year. This was the approach suggested to me by letting agents and accountants.

I filed my TR1 form to register for self assessment from overseas and gave the revenue my overseas address so everything is very much above board and transparent.

The only problem I have is that i live in a place with high property taxes - and they include any properties you own any where in the world. I get a credit for the property tax paid in ireland and then have to pay the difference between the irish property tax rate and what it would be if the property was here which is about 4 times more.

él statutorio

NIMAN wrote: »

.... or you could do what a few landlords do and take cash in hand and say nothing to Revenue.

Not recommended, but I know a few who do it.

It's not worth going down this route.

I started off not declaring (down to laziness on my part, "I'll get to it eventually") but the revenue caught up to me about 2 years ago and stung me with a nasty bill plus penalties.

Nobody to blame but myself and if had bothered to get the finger out from the start I'd have been fine.

Santa Cruz

oxygen_temp wrote: »

Hi

I got offered a job abroad I am thinking of taking it, but first I need to find out the feasibility of renting out my house. I'm really clueless on this,but do I have bright correct?

per month the mortgage cost me e650.
I know I could possibly get e500 rent per month for the entire house.

am I obliged to pay %52 tax on that 500? Leaving me with a net loss of close to 400 per month...

There are a number of expenses which can be offset against the rental income. Its easy say it but work out all your costs and then have a word with an accountant

Riverireland

You can earn up to 10k per year under the rent a room scheme. Is it possible for you to use the box room as your residence when you are back in Ireland and keep the utilities etc still under your name. I THINK this should be ok.

athtrasna

Riverireland wrote: »

You can earn up to 10k per year under the rent a room scheme. Is it possible for you to use the box room as your residence when you are back in Ireland and keep the utilities etc still under your name. I THINK this should be ok.

No it isn't! It has to be your PPR in order to qualify for Rent A Room and the OP is clearly going to be based abroad so what you're suggesting is illegal. FYI the limit was increased to 12.5k in the last budget but it's still not legal in this case.

The_Conductor

Riverireland wrote: »

You can earn up to 10k per year under the rent a room scheme. Is it possible for you to use the box room as your residence when you are back in Ireland and keep the utilities etc still under your name. I THINK this should be ok.

It most certainly is *not* ok.
It is a breach of the Rent-a-room scheme- to say nothing of the simple fact that you have to be tax resident here to avail of the scheme.
Also- if you were familiar with the scheme- its 12k- not 10k.

Infraction for encouraging the OP to breach Irish tax law.