Letting a house - not an Irish resident

Jude13

Hi all,

We are thinking of buying a house in Ireland to let initially and then either sell or move into if we move back in 10+ years time.

We are non-resident Irish passport holders living in a tax free environment.

How does taxation work on the rental income?

adrianw

Income tax will be due as the income arises from Irish situate property.
Depending on whether the tenant pays you direct or to an agent, withholding tax may be applied for which you will receive a tax credit.
There will also be property tax due relative to the value of the property.

Jude13

Cheers, how would I go about paying this? Is it monthly/yearly? Do you know if you can pay it online?

adrianw

You would need to register for Income tax.
Preliminary tax for 2015 for example would be due in November 2015 with the balance due the following November.
Preliminary tax is based on the previous years tax liability.

LPT is based on who is the registered owner of a property on the 1st November of the previous year.

You will need to register for income tax with Revenue by completing a TR1(FT) form.

All taxes can be paid online.

Jude13

You sir are a gent, thank you.

No I just have to get the expat mortgage sorted

Jude13

Is there a cut off allowance like the UK which has something like you can earn 10k profit (money left over after paying the months mortgage) without paying tax?

adrianw

Ireland, has a slightly different model. We have tax credits - so the value of tax you would pay.

The personal credit is €1,650 however as a non-resident you would NOT be entitled to this credit. So would be taxable on the total profit.

Jude13

So if the rent is only covering the mortgage (or less) then I would pay no tax as there is no income?

I really appreciate your help.

I will obviously have to pay property tax.

Rod82

As far as I know, all income(rent) is taxed, whether it covers the mortgage or not.

Mellor

Rod82 wrote: »

As far as I know, all income(rent) is taxed, whether it covers the mortgage or not.

The full rent isn't treated as income, you are allowed deductions. You can deduct 75% of the mortgage interest, plus and other deductions, things like insurance, repairs, bills, LA rates, management etc. But not the principle repairments

adrianw

just as an addendum to Mellor's point, there is a body called the Private Residential Tenancies Board - all rented property must be registered with them.

In order to claim the 75% interest deduction, you MUST be registered with them. There is no movement or negotiation on this criteria. If you are not registered, no part of the deduction is allowed.

I think the fee is around the €90 mark (which is also tax deductible).

The property tax is not.

Jude13

Had a quick look, will delve more in to it later, it seems like a good idea for all parties.