Emigrating - Renting Out my First Time Buyer House

Hi folks,

I am a single person living in my 3 bed apartment with 2 other tenants paying rent as per the Rent a Room scheme. I bought the 3 bed apartment 5 years ago as a First Time Buyer and there is 10 years of payments remaining.
I am looking to emigrate in 6 months and will be placing my house under the care of a property management company, I will be filling my room with a new tenant so that all rooms are occupied with tenants. My query is do I have to switch my rental earnings over from the Rent a Room scheme to the normal income tax rates? Also, would my mortgage be affected (Does the bank have to be informed and then the mortgage would have to be switched over to a Buy To Let?

Caranica

If you're not living there then you can no longer avail of rent a room tax free income.

Following this as am interested in the same. From tax and insurance etc

Zenify

theboss.com wrote: »

Hi folks,

I am a single person living in my 3 bed apartment with 2 other tenants paying rent as per the Rent a Room scheme. I bought the 3 bed apartment 5 years ago as a First Time Buyer and there is 10 years of payments remaining.
I am looking to emigrate in 6 months and will be placing my house under the care of a property management company, I will be filling my room with a new tenant so that all rooms are occupied with tenants. My query is do I have to switch my rental earnings over from the Rent a Room scheme to the normal income tax rates? Also, would my mortgage be affected (Does the bank have to be informed and then the mortgage would have to be switched over to a Buy To Let?

I think you will be able to do rent a room for the whole year even if you are not in Ireland for the full year. so 2021 is ok for rent a room. I remember this issue coming up when I was working doing tax returns a long time ago. Things may have changed since though. as usual here on boards seek professional advice on this.

After 2021 yes this will be taxable. How it is taxable has many variables. There used to be a withholding tax to foreign landlords, basically the tenant is liable to withhold tax from the rent and send to revenue. Maybe someone else here could shed some light on that topic?

It will have an effect on capital gains tax if you ever sell the property too. Basically any gain from selling compared to purchase price will be taxted at 33% for the proportion of the time you weren't there.

Not sure on the mortgage but it does change your home insurance.

Hope that's a help to some of the issues you'll be facing and good luck

Zenify

Any tax the tenants withhold will obviously offset your tax liability.

Government buildings

Would there be capital gains payable on the portion of the house rented out?

agoodpunt

Leave ur stuff lock the room keep ur rent a room tax advantage letting the the whole unit inccurs taxs agent fees etc you may end up with less.
apart from that its your private residence not a BTL

Caranica

agoodpunt wrote: »

Leave ur stuff lock the room keep ur rent a room tax advantage letting the the whole unit inccurs taxs agent fees etc you may end up with less.
apart from that its your private residence not a BTL

That would be fraud if the OP is emigrating. It can be done legally where someone is temporarily relocating for a course or work but it has to be your PPR, which it can't be if the OP moved to another country.

Capital gains tax will be due on sale of the property if it is rented and then sold at a value higher than purchase price. It is a pro rata tax based on time rented as a percentage of time owned.

the_syco

theboss.com wrote: »

I am a single person living in my 3 bed apartment with 2 other tenants paying rent as per the Rent a Room scheme.

Do the tenants have leases? If not, give them notice. Pretty sure eviction ban doesn't cover licences.

Put anything that you don't want broken put in a lockup or the attic. Then have the property management company issues leases for new tenants.

Do you know how long you plan to leave the country for? Is it a 2 year work visa, or longer term?

Mrs OBumble

Zenify wrote: »

Any tax the tenants withhold will obviously offset your tax liability.

The OP has told us that it will be managed by a property manager. So the tenants are not responsible for withholding.

Government buildings wrote: »

Would there be capital gains payable on the portion of the house rented out?

Yes.

Kleine Hundin

You could have tax liability in the country you are emigrate to. Especially EU countries communicate with each other.

And you will want to have your tax affairs in order if you decide to sell later.

As a non resident landlord you will only pay your lower tax rate on your rental income* minus the usual allowances deductions.

*Tax rate depends the amount of income puts you in the lower tax band.

I recommend using an agent for managing the property and accountant to make your filings with revenue. Both fees can are offset against tax liability.

Baby01032012

As mentioned above at the moment you have licensees as you were living in the apartment. I’ve assumed you haven’t given them leases. Are you happy for them to now become tenants and have full security of tenure rights?
You mention handing over to a letting agent. Not many will take on a room rental. Unless you are planning on getting rid of your licensees and letting the whole apartment.