Rental income

Carter D

Hi is rental income tax separate to your PAYE income or are they both added up together and taxed .

I'm looking to buy a property in the future and rent it out either a house or apartment.

Gumbo

Carter D wrote: »

Hi is rental income tax separate to your PAYE income or are they both added up together and taxed .

I'm looking to buy a property in the future and rent it out either a house or apartment.

Yes, it’s added to your paye for the period and your taxed according to your rate. Less allowable deductions etc.

Carter D

Gumbo wrote: »

Yes, it’s added to your paye for the period and your taxed according to your rate. Less allowable deductions etc.

Thanks for the reply so if my income is 50k before tax along with rental income of say 14,400 I will be taxed from €64,400

dennyk

Your PAYE income will be taxed just like it is now, with your PAYE and personal tax credits applied to that. Your net rental income (total rental income minus allowable expenses) will be taxed separately at your marginal rate (which will be 40% income tax if you're making €50k PAYE, plus USC and PRSI).

If you have less than €30k in gross non-PAYE income *and* less than €5k in net non-PAYE income in total, you can report it on a Form 12 at the end of the year. If you make more than those thresholds in non-PAYE income, you'll be a chargeable person and will have to complete a full Form 11 self-assessment and start making preliminary tax payments each year.

See more at Revenue's site:

Rental Income Tax:
https://www.revenue.ie/en/property/rental-income/irish-rental-income/index.aspx

Self-Assessment:
https://www.revenue.ie/en/self-assessment-and-self-employment/guide-to-self-assessment/who-should-register-for-income-tax-self-assessment.aspx

Geuze

Carter D wrote: »

Thanks for the reply so if my income is 50k before tax along with rental income of say 14,400 I will be taxed from €64,400

You net rental profits are added to all other income, and taxed.


Net rental profits = gross rental income less deductions.

ted1

Carter D wrote: »

Thanks for the reply so if my income is 50k before tax along with rental income of say 14,400 I will be taxed from €64,400

Yes and no. You’ll be allowed some deductions.
USC is paid on everything

DubCount

Carter D wrote: »

Thanks for the reply so if my income is 50k before tax along with rental income of say 14,400 I will be taxed from €64,400

Just to note, if you make a loss on your rental income (say a tenant stops paying), you cant offset that loss against your PAYE income. So if you have 50k PAYE income but make a loss of 5k on your rental property, you still pay tax on the 50k PAYE income as usual. The 5k loss must be carried forward against future rental profits and cant be used in any other way.

Gumbo

JimmyMW wrote: »

Fair enough lads, point made, however its common knowledge this is happening, i am not asking to discuss the extent to which it is happening, i am simply asking if there are any controls to stop it, if you don't know the answer then fine, no need to compare any other cash business regulatory controls as this does not address my question.

Also your comparisons of the taxi man you paid cash to is misleading, as the equivalent comparison is the lad with no taxi plate, who is not registered and who is not running a business legally, who you paid cash to yesterday for a spin, similar applies to your corner shop comparison

If you can’t back up your claims then no point.
You can’t spin it around and say it’s up to other posters to prove it.

It’s common knowledge that LL’s pay tax also.

Random audits will catch some people. The same way revenue random audit all businesses.

JimmyMW

Gumbo wrote: »

If you can’t back up your claims then no point.
You can’t spin it around and say it’s up to other posters to prove it.

It’s common knowledge that LL’s pay tax also.

Random audits will catch some people. The same way revenue random audit all businesses.

Read my post again, I never asked you or anyone else to prove anything, i am fully aware that landlords pay tax, but not all. I take your point my use of the word large given i do not have figures to back that up was in appropriate and only reflects my opinion of it not actual figures. however I only have to know of 1 who does not pay tax to substantiate my query.

I note you have not addressed your misleading comparisons at all?

To be clear i am talking about the type of people who have a multiple properties, who are not registered with RTB, renting for cash, and not paying tax on rental income, but paying tax through their PAYE employment, cant see random tax audits catching them too often. In the same manner that a person in PAYE employment who sells weed on the side wont get caught for tax on their weed income with a tax audit.

Claw Hammer

JimmyMW wrote: »

Yes i get that, but as far as i can see for these guys to get caught it relies on someone reporting them? I was more asking if the likes of the revenue can check how many properties are registered to the same person, who is paying the electric bill etc to catch these guys out. If we are relying on the reporting from the ordinary joe soap for this kinda thing, as a country we are in big trouble IMHO

The Revenue tool kit is expanding all the time. LPT ids flag the number of properties a landlord has. The Revenue obtain information from a number of sources such as the RTB, HAP etc. The Revenue also use lifestyle analysis to identify individuals who have a lifestyle which is out of kilter with their known income. In many cases it comes to light after several years that an individual underdeclared their income. It is becoming ever more difficult to operate in cash. Many business now refuse cash payment and most large business require phone numbers and material. The revenue can now build up a picture of expenditure by an individual and spot the gaps.
it is also easy to link tenants to a property.

Pkiernan

Any Landlord not declaring rent is a fool

JimmyMW

Claw Hammer wrote: »

The Revenue tool kit is expanding all the time. LPT ids flag the number of properties a landlord has. The Revenue obtain information from a number of sources such as the RTB, HAP etc. The Revenue also use lifestyle analysis to identify individuals who have a lifestyle which is out of kilter with their known income. In many cases it comes to light after several years that an individual underdeclared their income. It is becoming ever more difficult to operate in cash. Many business now refuse cash payment and most large business require phone numbers and material. The revenue can now build up a picture of expenditure by an individual and spot the gaps.
it is also easy to link tenants to a property.

Thanks for answering the question, that's what i was wondering if the revenue cross check across the databases, as one would imagine anyone with a second property should be looked at closely in order to stamp this out. However say a guy is working in a PAYE position, has two houses the one he lives in and one that is rented out, unregistered with the RTB, all bills in own name, and getting cash in rent, entertainment/drinks/eats the rent money monthly, is this guy likely to get caught in the current system even after years?

JimmyMW

Pkiernan wrote: »

Any Landlord not declaring rent is a fool

Agreed

Claw Hammer

JimmyMW wrote: »

Thanks for answering the question, that's what i was wondering if the revenue cross check across the databases, as one would imagine anyone with a second property should be looked at closely in order to stamp this out. However say a guy is working in a PAYE position, has two houses the one he lives in and one that is rented out, unregistered with the RTB, all bills in own name, and getting cash in rent, entertainment/drinks/eats the rent money monthly, is this guy likely to get caught in the current system even after years?

In many cases tenants get bills in their own name. The Revenue will be aware that there are 2 properties for LPT and will wonder what is happening to them. They can check the electricity consumption and will look at the landlords bank accounts. It is difficult enough to eat and drink away rent consistently for years and not leave a trace. The Revenue know how much people need to live on and will spot someone "living on air".

JimmyMW

Claw Hammer wrote: »

In many cases tenants get bills in their own name. The Revenue will be aware that there are 2 properties for LPT and will wonder what is happening to them. They can check the electricity consumption and will look at the landlords bank accounts. It is difficult enough to eat and drink away rent consistently for years and not leave a trace. The Revenue know how much people need to live on and will spot someone "living on air".

Fair enough, that's the only net to catch these people anyway, thanks for answering.

Claw Hammer

JimmyMW wrote: »

Fair enough, that's the only net to catch these people anyway, thanks for answering.

The net has been tightening for years because of IT. data is now retained for years and is more accessible. A landlord will be asked in an audit for names of tenants and the dates of the tenancy and the amount of the rent. If the landlord tells a lie of any kind it may be the Revenue have evidence to the contrary. There might be an active wifi account in the tenants name at a time the Ll says the place was empty. In that case the landlord will have walked into the den. He will be asked if he wishes to change his story. If he doesn't change the Revenue will say they know he is lying and offer him another chance. The LL will eventually be tied in knots. A few years ago people might pay a thousand pounds in cash for something without it raising an eyebrow. Now some people won't take even €100 in cash.