Tax on Rental Income

Abbey127

Hi does anyone know how much tax you would have to pay to have a lodge cabin built in the back of my garden to rent out ? Thanks in advance

averagejoe123

Abbey127 wrote: »

Hi does anyone know how much tax you would have to pay to have a lodge cabin built in the back of my garden to rent out ? Thanks in advance

You will need to provide a lot more information to get a meaningful answer.

Presuming the cabin is independent to your PPR you will be liable for tax on the whole rent minus the allowable expenses. The tax rate will be 20% or 40% depending on your other sources of income.

Abbey127

averagejoe123 wrote: »

You will need to provide a lot more information to get a meaningful answer.

Presuming the cabin is independent to your PPR you will be liable for tax on the whole rent minus the allowable expenses. The tax rate will be 20% or 40% depending on your other sources of income.

It will be a two bed lodge cabin 52sq m it will be built on in my parents back garden

Graham

Mod Note

As this is not related to mortgages I've split into a new thread.

Stheno

Abbey127 wrote: »

It will be a two bed lodge cabin 52sq m it will be built on in my parents back garden

Do you have planning permission for that?

ceekay74

Who owns it?

Abbey127

Stheno wrote: »

Do you have planning permission for that?

Yes I do

Abbey127

ceekay74 wrote: »

Who owns it?

Hi I will

20/20

I didn't know you need planning permission for the cabins . Do you ?
What sort of money does the cabin cost fully erected onsite ?

averagejoe123

Abbey127 wrote: »

Yes I do

But its going to be in your parents back garden?

You need to give more information here as there isn't a generic answer to your question.

Who owns the land where the cabin is to be built?
Who is going to rent it? Family member or general public?

Stheno

20/20 wrote: »

I didn't know you need planning permission for the cabins . Do you ?
What sort of money does the cabin cost fully erected onsite ?

Think you do to have them as habitable spaces for people to live in. Or I may be confusing p.o. with building regulations requirements

Abbey127

averagejoe123 wrote: »

But its going to be in your parents back garden?

You need to give more information here as there isn't a generic answer to your question.

Who owns the land where the cabin is to be built?
Who is going to rent it? Family member or general public?

Hi yes this is why I'm asking does anyone know more about this or have they done . The cabin will be on my parents land I don't need planning permission if the log cabin is 25sq m . It will be rented out to general public

Abbey127

20/20 wrote: »

I didn't know you need planning permission for the cabins . Do you ?
What sort of money does the cabin cost fully erected onsite ?

The cost is different for everyone depending whst they are after . You don't need planning permission if the cabin is 25sq m I'm not sure I will need it if the cabin will be on my parents land . I was hoping someone eles would know more about it or has done something similar

averagejoe123

Abbey127 wrote: »

Hi yes this is why I'm asking does anyone know more about this or have they done . The cabin will be on my parents land I don't need planning permission if the log cabin is 25sq m . It will be rented out to general public

Have your parents gifted you this land? Who is going to be the owner of the cabin? Who is paying for it to be put up?

ceekay74

If you are the one receiving the rent, it sounds reasonable that you will be the one declaring the income.

What rate of tax are you currently on?

Fian

Assuming you can build and rent out this structure:

you will pay income tax and USC on the rental income (less allowable expenses) the same as any other income. So depending on the extent of your other sources of income you will pay at the standard or higher rate.

You will need to make a tax declaration using form 11 in November of each year (electronically) or in October if you do it on paper.

ldy4mxonucwsq6

Abbey127 wrote: »

The cost is different for everyone depending whst they are after . You don't need planning permission if the cabin is 25sq m I'm not sure I will need it if the cabin will be on my parents land . I was hoping someone eles would know more about it or has done something similar

You do need planning permission if someone will be living in the cabin.

Duffryman

Abbey127 wrote: »

You don't need planning permission if the cabin is 25sq m I'm not sure I will need it if the cabin will be on my parents land

So was it just a typo up above, where you said 52 sq. m.?

Either way, rental income from it would be assessed for tax purposes in the same way as any other rental property. Take the figure of rent money received, deduct the total of allowable expenses, and pay 20% or 40% on the rest, depending on the level of your other income. You'll pay USC as well, in the usual way. Not sure about PRSI.

If you haven't done so already, have a look at https://www.revenue.ie/en/property/rental-income/irish-rental-income/index.aspx

By the way, all those other questions other people are putting to you are valid, even if they're not directly relevant to your own initial question.

One of the main ones being who actually owns the plot of ground this cabin will be built on? Have your parents gifted it to you, or are they about to?

Not sure myself if you're even allowed to build on land owned by somebody else. And if even you did, there could be all sorts of legal repercussions in the future.

Abbey127

averagejoe123 wrote: »

Have your parents gifted you this land? Who is going to be the owner of the cabin? Who is paying for it to be put up?

Yes they have. I will be the owner of the cabin and will be paying for it

Stheno

Abbey127 wrote: »

Yes they have. I will be the owner of the cabin and will be paying for it

Do a search on here on log cabins and save yourself wasting money

3DataModem

Duffryman wrote: »

Not sure myself if you're even allowed to build on land owned by somebody else.

The general rule (open to be corrected) is if a permanent building is built on land, it becomes the property of the owner of the land. We use things like leasehold etc to create weird exceptions to this around airspace, common areas, etc... but essentially as described; this building will belong to OPs parents.

However if OP is receiving and benefiting from the income with the permission of the owners (again, seems to be what he describes), then he declares the income to revenue.

Claw Hammer

Abbey127 wrote: »

Hi yes this is why I'm asking does anyone know more about this or have they done . The cabin will be on my parents land I don't need planning permission if the log cabin is 25sq m . It will be rented out to general public

There is no need for planning permission for an extension to a house if the extension does not bring the original size of the house up by more than 40sqm, or 60sqm if two storey. This exemption does not apply in the case of a separate structure intended as a separate dwelling. There is also an exemption for a third class building such as a shed if it is under a certain size including height provided it is not for human habitation.
A log cabin intended to be rented as a dwelling, or lived in at all, requires planning permission. The chances of getting such a permission are very low.

awec

Abbey127 wrote: »

Yes I do

No you don't.

Gumbo

Abbey127 wrote: »

Yes I do

No to don’t. I guarantee you don’t have planning permission for a log cabin that can be rented out as a habitable space in your parents back garden.

20/20 wrote: »

I didn't know you need planning permission for the cabins . Do you ?
What sort of money does the cabin cost fully erected onsite ?

You need planning to make it habitable. Planning will be refused in this scenario.

Abbey127 wrote: »

Yes they have. I will be the owner of the cabin and will be paying for it

You will be the owner of a garden shed.

awec wrote: »

No you don't.

100% agree

OP, do some proper research into this before handing over any money to log cabin companies. I note from your other threads you are applying for Garda and prison service jobs, bear in mind the prosecution for breach of planning and building regulations through the enforcement process are criminal convictions so it may have an impact on your career choice.

ted1

Abbey127 wrote: »

Hi yes this is why I'm asking does anyone know more about this or have they done . The cabin will be on my parents land I don't need planning permission if the log cabin is 25sq m . It will be rented out to general public

Pretty sure that’s a sheds and not a habitable residence also is 25m not below the new limit Fira 1bed

_Brian

Problem with log cabins is by the time you add enough upgrades to make them compliant to building standards they are no cheaper than most regular building methods.
Plus much more external maintenance

bri007

It takes one person to report it to the council that you have people living in the log cabin and all your money is then gone, as you will be forced to pull the cabin down.

I heard of some of these log cabin companies telling customers that they can rent these out but they are not telling the full true story.

It’s a costly thing to do and one that won’t work out, other than using it as a gym or playroom etc and not as a habitable place.

Samuel T. Cogley

Around 54% less deductible expenses which I'm presuming you won't have that many of.

TheChizler

Samuel T. Cogley wrote: »

Around 54% less deductible expenses which I'm presuming you won't have that many of.

Worst case scenario though. Nobody can say for sure without knowing the income and credits of the landlord.

ted1

Samuel T. Cogley wrote: »

Around 54% less deductible expenses which I'm presuming you won't have that many of.

Ground rent to the parents!!!

Abbey127

Thanks for the advise. I will be going ahead with getting one . I have already told my neighbours I will be building a log cabin they have no problem with it also it's not inn the way of anyones view . So I don't think they can tell me what I can and can not build on my own property. There are a good few log cabins around my area that are being rented out on the north side of Dublin I also have a neighbour who has a log cabin out there garden but are not renting it out . I am also in a better position and have more space so they would have there own enterence to the cabin . I just have to ring the council and see if I can allow them to use a parking space behide my house as I know it's doesn't belong to a house.