Throwing away money???

Seamybeag

Im a 51 year old in the country with an apt in Dub.Im 15 years into a 30 year mortgage.The apt is only just out of neg equity almost 100000 less than paid for.The rent covers the mortgage but the letting fees building management fees and the whopping 50% tax I have to pay on rental income means I pay around 5500 every year on somewhere I dont even live!!
Could someone give me their opinion on this . A mate told me to claim furniture repairs to keep the tax down but Im scared Ill be hit with even higher bills if Im caught doing this .Should I sell now and cut my losses ? Is there any point in prolonging this ? With a recession lining up post covid will property prices start to plummet again?
Any advice would be really appreciated

Thanks in advance

DubCount

First up, making up expenses for a tax declaration is not advisable. If you get caught you could end up with interest an penalties as well as tax. Revenue are good at finding the rogues. They'll notice if your expenses are out of line with other landlords.

I don't believe anyone can make residential letting while having a mortgage work. Many posters here will talk about the asset you have at the end. Sit down and do some maths. Put 10k p.a. into a pension scheme for the same price as the 5.5k you put into the property, and get less heartache. If it was me - I'd sell.

Contact a financial advisor for professional guidance. Better advice than I can give.

pearcider

I’d hold onto it. What would you do with the cash if you sold it? Put it in the bank earning no interest? All the good DB pension funds are closed. Pension fund might be wiped out unless you manage it yourself to stay ahead of inflation. Would you trust yourself to pick good stocks? Doesn’t sound like it. Wouldn’t trust the banks or the pension funds myself. They take their fees up front and you could be left with very little if we go through a bout of inflation. But a good property will always generate an inflation adjusted return. You could do the letting yourself and the tax return. It’s straightforward.

Graham

So you'll be 66 when the mortgage is cleared leaving you with a property in Dublin and a potential source of income.

I could think of worse things to have in my back pocket at 66.

con747

Seamybeag wrote: »

Im a 51 year old in the country with an apt in Dub.Im 15 years into a 30 year mortgage.The apt is only just out of neg equity almost 100000 less than paid for.The rent covers the mortgage but the letting fees building management fees and the whopping 50% tax I have to pay on rental income means I pay around 5500 every year on somewhere I dont even live!!
Could someone give me their opinion on this . A mate told me to claim furniture repairs to keep the tax down but Im scared Ill be hit with even higher bills if Im caught doing this .Should I sell now and cut my losses ? Is there any point in prolonging this ? With a recession lining up post covid will property prices start to plummet again?
Any advice would be really appreciated

Thanks in advance

Are you claiming all you should be? You are entitled to claim for wear and tear.
Have a look here and maybe seek advice from an accountant. https://www.revenue.ie/en/property/rental-income/irish-rental-income/what-expenses-are-allowed.aspx

Seamybeag

Thanks for the advice! If I sold now I'd maybe cover the mortgage but would be short for any estate agent /legal fees. I'd certainly have nothing in the bank. But that was the goal all along to have an income in retirement. It just seems that its getting more and more expensive...
Thanks again

Browney7

Seamybeag wrote: »

Thanks for the advice! If I sold now I'd maybe cover the mortgage but would be short for any estate agent /legal fees. I'd certainly have nothing in the bank. But that was the goal all along to have an income in retirement. It just seems that its getting more and more expensive...
Thanks again

What was the difference between capital outstanding on the mortgage this time last year compared to now? How does this compare to the tax bill you've paid out?