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Rental income tax

  • 29-11-2017 10:42am
    #1
    Smash123
    Registered Users, Registered Users 2 Posts: 1 ✭


    Hi,
    I currently have a mortgage on a property, I have the property around 7 years now, at the beginning I was living in the property myself, a few years later I decided to go back to Uni to complete a full time 4-year course, I was still living the house at that time but I rented one room out (€200 pm) to help pay for the mortgage. My mortgage for the property is around €450 pm therefor I'm not making a "profit" on the property.
    2 years ago, I moved to Dublin for work and continued to rent the room out (tenant changed and I decreased the price to €140 pm).  I'm currently renting a room in Dublin. I decided to apply for a mortgage in Dublin and I received a letter from the bank requesting a Tax return to revenue (form 12) confirming declared gross rental income along with corresponding P21 balance statement.
    I am not a registered landlord, not have I paid tax on my income so I’m in a bit of a pickle.
    I have bank statements showing the rental income, I have receipts for money I spent on the house (painting, general maintenance etc).
    I'm not sure what my next step should be and I don't want to open a massive can of worms, I didn't think I had to register as a landlord if I was renting a room out, but I probably should have 2 years ago when I moved to Dublin.

    Any help would be appreciated.


Comments

  • #2
    Geuze
    Registered Users, Registered Users 2 Posts: 14,039 ✭✭✭✭Geuze


    If you own the house, lived in the house, and rented out a room in the house, then you should be in the Rent A Room scheme.

    https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/index.aspx


  • #3
    Geuze
    Registered Users, Registered Users 2 Posts: 14,039 ✭✭✭✭Geuze


    What conditions must be met?

    There is an annual exemption limit for Rent a Room Relief, as follows:

    Annual exemption limit for Rent a Room Relief
    Year Income amount exempt
    2013 €10,000
    2014 €10,000
    2015 €12,000
    2016 €12,000
    2017 €14,000

    This limit applies to the gross amount of income received for the room or rooms in your home. The gross income is the total income before you deduct expenses.

    Expenses include the maintenance of the room let and capital allowances due on fixtures and fittings.

    If your gross rental income does not exceed the above exemption limit, you do not pay Income Tax (IT), Pay Related Social Insurance (PRSI) or Universal Social Charge (USC).

    If it does exceed the exemption limit, the total amount of income is taxed.

    You cannot claim the relief against income received for the use of the room(s) from:

    your child or civil partner
    an employer
    an employee
    short-term guests, including those who book accommodation through online booking sites.


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