costs associated with renting out a property

hondabanner

hi, i might have to relocate with my job for a year and i am just wondering if i was to rent out my property, what are the costs involved?

my mortgage is roughly 1000 euro a month and id be looking to rent it out for about 1200 a month p.s its a 4 bedroom house

thanks

o1s1n

Have you been following the news??

StevenToast

Haha...this has to be a joke, right?

Right?.....

HeidiHeidi

Where are you located that you're planning to rent a 4-bed house for €1200?

Assuming that's not a wind-up (which I find hard to believe, tbh) -

• If you're on the top tax rate, approx 52% of your rent will go in tax and USC etc
• Fitting the house out to rental standards
• Maintenance and repairs
• Annual registration with RTB
• Paying someone to do up a tax return if you can't/won't do it yourself
• Potential for periods with no rent, and no house, if a tenant goes rogue (there are any amount of threads on here about this)
• Tenants accrue rights after 6 months, so you may find yourself without your house in certain circumstances - consult RTB website for the ever-more-restrictive list of reasons you can serve notice on tenants (and then you have to hope they actually move).

It may prove better value to leave your house empty.

hondabanner

im living in county clare not dublin youd get a house here for 1200-1400

lawrencesummers

If you relocate foreign your tax implications are different to relocating within the country.

If your still based in ireland You will need to declare the rental income to revenue and pay whatever tax is liable.

You may need to get the advice of an accountant.

There is also the possibility of renting out rooms and still living in the house.

hondabanner

https://www.boards.ie/discussion/comment/120332503#Comment_120332503

If your not gonna bother answering the question don’t bother commenting

Geuze

https://www.boards.ie/discussion/comment/120332548#Comment_120332548

52% of the rent does NOT go in tax.

You pay income tax at your marginal rate, which might be somewhere from 0% to 52%, on the net rental profits, not on the gross rent.

HeidiHeidi

https://www.boards.ie/discussion/comment/120332968#Comment_120332968

Did you miss the "if you're on the top rate of tax" bit of my sentence?

You pay tax on all the rent, less allowable expenses, which are spread over a number of years. Your mortgage payment is not allowable, except for the interest which is allowable at varying levels on mortgages taken out between 2004 and 2012, and it's not allowable at all if you declare the house as being rented (which you should, but presumably a lot don't if it's a temporary measure).

walterking

I have an investment property in a good Midland area

I rent it on Airbnb for about 100 nights a year.

Under no circumstances will I contemplate renting long term due to the meddling in the market by government and especially as there's a strong chance of a sf led government in 2 years where there's a strong chance that landlords will be stripped of rights.

I know one person who rented when they went abroad and it took them over 8 months to get it back on their return and got no rent for 6 months.

Utter hell.

o1s1n

https://www.boards.ie/discussion/comment/120332968#Comment_120332968

If you are a PAYE worker earning into the top tax bracket, yes it does.

farmingquestion

https://www.boards.ie/discussion/comment/120332548#Comment_120332548

A small chance of no money v 100% chance of no money.

Col_30

Can you not just rent a room or two out? You would still have a base here if you needed to return. I am not sure what the rules are here, but it could be worth exploring.

Geuze

https://www.boards.ie/discussion/comment/120334754#Comment_120334754

Tax is paid on the net rental profits, not on the gross rent.

o1s1n

https://www.boards.ie/discussion/comment/120338725#Comment_120338725

You're being pedantic for the sake of it.

Yes, you pay tax on your net rental profit. This will only be lower than 52% if you can manage to reduce it with expenses.

If your rental income was 18,000 a year, you had little to no deductions that year and you are earning 45k as a PAYE worker how much tax will you pay?

I'll give you a hint, it'll be about 52%.

Donald Trump

https://www.boards.ie/discussion/comment/120341283#Comment_120341283

If they have moved abroad, depending on their tax status, from the Irish point of view there will be a withholding tax (I think 20%?).

That said the OP didn't specify whether it was a move abroad or inside the country.

If you have "little to no deductions" then that means you just received a nice passive income. Congratulations.

Geuze

https://www.boards.ie/discussion/comment/120341283#Comment_120341283

Yes, perhaps, I am being pedantic.

Please note that the top 52% rate kicks in about 70k.

So in your example of 45k wages + 18k rental profits, the top marginal rate is 48.5%.

Tow

The 20% withholding tax is the tenant's responsibility to collect and send to Revenue, if the landlord is outside ireland and does not have an agent. This will be offset against the (up to) 52% Income Tax, USC and PRSI change.

The real probably is getting the house back after a year.

relevanc

https://www.boards.ie/discussion/comment/120346351#Comment_120346351

I think you’ll find the 52% kicks in at €40k not €70k!

OP you’d be mad to let your property. Rent a room or leave it vacant

Geuze

https://www.boards.ie/discussion/comment/120358907#Comment_120358907

After 40k there is 40% tax, 4% PRSI, and 4.5% USC, equals 48.5% marginal tax rate.

After about 70k, the top 8% USC starts, so the top rate is 52%

https://www.revenue.ie/en/jobs-and-pensions/usc/standard-rates-thresholds.aspx

relevanc

https://www.boards.ie/discussion/comment/120359091#Comment_120359091

You are a pedantic individual !

regardless 40% marginal rate at €40k. 48.5%\52% is a hell of a disincentive

Geuze

It's my job to know these things.

That's why everything I type is factual.

If I'm not sure, I won't type it, or I will qualify it.

Yes, the entry point to the top tax rates in Ireland is really, really low.

o1s1n

https://www.boards.ie/discussion/comment/120346351#Comment_120346351

Are you actually being serious?

Here's your original post;

https://www.boards.ie/discussion/comment/120332968#Comment_120332968

This makes it sound absolutely outlandish that anyone would be paying 52%. 'NOT' all in caps as if the thought of such was laughable.

Even going to far as to bring a nice big 0% into the equation in the next sentence. 'Those landlords couldn't POSSIBLY be paying almost half their rental income on tax!'

In reality, your average earner as per your own admission is paying 48.5% income tax and not 52%.

A 3.5% difference.

Talk about not seeing the wood for the trees.

The original point still bloody stands, it's a hell of a lot of tax, even sans that whopping additional 3.5% your pedantry needed to correct everyone on.