Tax on rental income

engrish?

Hi,

Hoping for some advice. I bought a house in 2006 and I am currently in about 120k negative equity. In the 9 years since I have met a beautiful woman and we hope to start a family soon. The only issue is that our house is too small and we are restricted by the negative equity and the size of the mortgage payments.

My mortgage is 1900 per month and the houses we would like to live in are about €2400 to rent. With an expected rental income of €1200pm on my current house, I expect to net 600pm after tax meaning it is not feasible to move and our only option is to extend the property furthering our investment.

My question is regarding taxable deductions on rental income. I read on the revenue site that 75% of your interest on the loan can be deducted from the rental income. I pay about 1450 interest per month (I don't like admitting that) so 75% far exceeds the taxable amount. Am I right in saying that I can offset the mortgage interest against the tax on rental income?

Thanks

athtrasna

Better suited to the taxation forum

Geuze

Yes, 75% of the mortgage interest can be deducted from the gross rental income.

There are also other deductions.

The net rental profits are subject to tax.

Mr. Incognito

Guide to rental income in the stickies