Tax on rental income

Wesser

Hi there

If I bought a house and then rented it out for say 2 years and live abroad, how much tax do I pay on the income?
Say income of 1600 a month.
Which is 19200 a year.

If after 2 years I want the tenants out, because i want to move back in myself, and I give them the correct notice, do they have to leave or are there only certain circumstances whereby I can terminate the lease.

Thank you.

Mrs OBumble

Wesser wrote: »

Hi there

If I bought a house and then rented it out for say 2 years and live abroad, how much tax do I pay on the income?
Say income of 1600 a month.
Which is 19200 a year.
Thank you.

We cannot tell without knowing whar country ovearseas you will be tax resident in. You may be liable for tax there on income earned in Ireland.

April 73

If you are considering doing this you really need to do some extensive research on what is & isn't allowable against tax and the rights of tenants & landlords.
Not trying to be funny but you need a much broader depth of knowledge than a few answers on an Internet forum.

Try www.revenue.ie and www.rtb.ie for starters.

Wesser

Ok thanks, will do

aido79

Wesser wrote: »

Hi there

If I bought a house and then rented it out for say 2 years and live abroad, how much tax do I pay on the income?
Say income of 1600 a month.
Which is 19200 a year.

If after 2 years I want the tenants out, because i want to move back in myself, and I give them the correct notice, do they have to leave or are there only certain circumstances whereby I can terminate the lease.

Thank you.

At a very basic level you will pay a flat rate of 20% tax to the Irish revenue as a non resident landlord. You may then be liable to pay tax on your overseas income to the country in which you become tax resident. As you will already have paid 20% to the Irish revenue you will only have to pay the balance in the other country. This does not take into account any deductions or allowances you may be able to claim so best to seek advice from an accountant or someone who deals with this kind of thing.

In regards to a lease just remember a lease in Ireland is about as useful as a chocolate teapot and there is no telling how much more the government will interfere in the rental market over the next 2 years so it would be very hard to get an idea for how this would pan out for you.

3DataModem

If you are intending to return to live there yourself then it is less complicated to get the tenant out at the end. If you are not, then two years is a tricky tenancy length. Get an agency and pay them.

I'd consider renting to a friend you can trust OR doing short term lets via a suitable agency.

the-island-man

As a previous post you pay the flat 20% rate to the Irish authorities.

Two other important things to note:

1) Check if your destination is covered by a double taxation treaty with the Irish revenue: http://www.revenue.ie/en/practitioner/law/tax-treaties.html

2) There are two options to follow with Rental Income. You either allow the tenants deduct 20% of your rent money and pay it directly to the Irish Revenue and provide you with some certificate to show they paid or you elect a "Tax Collection Agent" who is resident in the state to be responsible for your tax liability. This can either be a letting agency or someone that you trust (family member, relative, friend).

antoinolachtnai

Where is the 20 percent flat rate for non resident landlords provided for in legislation?

Claw Hammer

antoinolachtnai wrote: »

Where is the 20 percent flat rate for non resident landlords provided for in legislation?

The TCA 1997

CIARAN_BOYLE

aido79 wrote: »

At a very basic level you will pay a flat rate of 20% tax to the Irish revenue as a non resident landlord. You may then be liable to pay tax on your overseas income to the country in which you become tax resident. As you will already have paid 20% to the Irish revenue you will only have to pay the balance in the other country. This does not take into account any deductions or allowances you may be able to claim so best to seek advice from an accountant or someone who deals with this kind of thing.

In regards to a lease just remember a lease in Ireland is about as useful as a chocolate teapot and there is no telling how much more the government will interfere in the rental market over the next 2 years so it would be very hard to get an idea for how this would pan out for you.

It's withholding tax you actually have to file your tax return after. Who can say if the liability will be more or less based on the information provided.

the-island-man

antoinolachtnai wrote: »

Where is the 20 percent flat rate for non resident landlords provided for in legislation?

Apologies, perhaps my language was incorrect. It is whatever the standard rate of tax is set at.
http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-45/45-01-04.pdf

aido79

CIARAN_BOYLE wrote: »

It's withholding tax you actually have to file your tax return after. Who can say if the liability will be more or less based on the information provided.

I have no idea what you are trying to say...

CIARAN_BOYLE

Alright lets take this from the top.

You are a foreign landlord.

When your tenant pays you rent he pays you 80% and withholds 20% which he gives to Revenue.
This is not the end of your tax obligation.

You must still file a tax return. You will get the 20% as a credit against your tax liability. This may result in a refund or a further liability.

This is not a 20% flat tax.

Hopefully that's easier to understand.

Henry Ford III

Yep. It depends on a few things. It may all be assessable at the high rate if your other income is high enough.

Wesser

Actually by pure coincidence I did actually meet with a tax advisor today who advised me exactly the same. Nice to know . 😎

antoinolachtnai

Wesser wrote: »

Actually by pure coincidence I did actually meet with a tax advisor today who advised me exactly the same. Nice to know . 😎

That's right. There is no flat tax for landlords abroad.