Renting and Subletting

Cork29

My brother is leaving the country for work reasons. He is asking me to manage his house.

He is offering it to me at the price of his morgtage repayment approx 1200 per month. I have permisson to do what i want with the property

It will be registered with rtb that i have the property

On daft similar properties for rent at 1600 per month.

I have contacts that work for a company that are training people in Cork from a different country staying anything from 1 to 6 months. They are payed an acomidation allowance per month while in Cork.

How can i rent out to them, they will be willing to pay 550 (550 * 4 = 2220) per month all inculive of bills etc on a month per month deal, just giving 1 months notice. I will be able to move in another person on the training.

Would i have to pay tax on this sublet, i will not be living in the properrty.

dudara

If your brother is working abroad, you’ll need to withhold 20% of the rent to him for Revenue purposes, unless he has it sorted himself.

If you do not plan to live in the house, you can’t avail of the Rent a Room scheme, so I believe the income would be taxable. You should get proper advice here.

Wesser

Your brother will need to pay tax on his rental income so that's the first thing that needs to be sorted.

If the house becomes your primary residence ie you are not living somewhere else and you are occupying a bedroom in the house then you could rent out the other bedrooms tax free under the rent a room scheme. If you are living somewhere else and renting out the whole house then you have to pay tax on rental income just like your brother

antoinolachtnai

You are paying your brother 1200 a month.

You will have to remit 240 euros of that to the revenue.

Your brother will then have to make a tax return. He may owe additional tax, depending on his allowances.



Your brother will need to register with RTB.

When he realizes this he will probably want to charge you more than 1200 euros. 1450 euros would probably be a realistic price.

He would also need to understand other implications of renting the property.

You will he making a profit of 1000 euros a month less expenses. You will need to pay tax on this.

You will need to register with RTB.

It seems a little complicated if you are not used to it. The costs are probably higher than you expected.

Klonker

seems over complicated OP if you are not going to live there. You should rent it out on behalf of your brother, basically as an agent. You can take 10%-20% of the rent as a fee (decide on this with your brother). You will have to pay tax on your fee, this will be an expense that your brother can deduct from his tax return. Whoever moves in will have to pay 20% of their rent to revenue and 80% to our brother as he is non resident landlord.

thebourke

roughly speaking...if you were getting 1200 a euro month rent..how much of that goes on tax/costs etc?

antoinolachtnai

thebourke wrote: »

roughly speaking...if you were getting 1200 a euro month rent..how much of that goes on tax/costs etc?

If you count the mortgage repayment as a cost (it technically is not a cost, it is a cash flow) then you should expect a negative figure, ie you have to put in extra money to cover the expenses and the tax.

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Cuddlesworth

Cork29 wrote: »

My brother is paying the tax and the bank repayment out of the 1200. He is all set tax wise then. He is registering me as the person renting to make it official. He is happy with the level of payment it is his idea. He is going to be working in the mines in Australia so he is not too worried about it. Lucky for him.

If I sublet to a tenant for only a month officially I would have to register them also?

For me to go to the effort of lots of different tenants on short stays I was hoping to make 500 euro per month to pay for a big holiday at the end of the year. It is not really possible?

If you live in the property and you sub let rooms, then your tenants have practically zero rights and you don't need to register them. Your also not bound by any tenancy laws or the RTB.

Renting the rooms can provide you with up to 14,000 Euros income before you have to pay tax on it.

antoinolachtnai

If you rent it from him for 1200 euros you need to remit 240 euros to revenue, so he will only get 960 euros. If he is fine with that, all well.

You certainly could make six grand after tax for the year from this but you would work for your money. It would be a lot of stress to keep the property continually occupied if you’d never done anything like this before.

Samuel T. Cogley

1200 per month he's going to pay roughly 5K pa in tax. That's roughly the position I'm in anyway.

3DataModem

In this situation (assuming the 1200 payment to your brother covers everything etc as you said), your best best is to move in, and earn from the other rooms via airbnb or as rent-a-room to lodgers. I'd advise considering the latter as you get the rent-a-room allowance tax free.

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Markcheese

So you're covering bills and insurance, and will also take whatever hit arises from the property not being fully occupied every month, and probably have to cover any redecoration, repair replacement costs... And an accountants fee and tax bill? Make sure you do a worst case scenario as well as a best case one..