Rental income

kikel

Hi,
I bought myself a house last year. Now i have to move away for work reasons. Going to be renting out my house. I'm on the higher tax bracket. What tax will i be paying on the rent i receive.
Is it right that i can earn a certain amount tax free?

Gegerty

Depends whether you want to make a profit or not. So long as you don't make a profit you'll pay nothing. If you start to make a profit then you'll be landed with the stamp duty and will be taxed on your rent.

kikel

Not feasable to make a profit.
The way it stands is the rent i'll receive will cover the mortgage exactly.
I'll be paying rent somewhere else.

antoinolachtnai

If the rent is covering the mortgage, then you are making a profit, for accounting and tax purposes, assuming your mortgage is pretty standard (i.e., not an interest-only mortgage).

Only the interest portion of your mortgage payment can be offset against your rental income for tax purposes.

You also need to think about the capital gains tax issues. You don't need to make a profit to run into stamp duty issues.

The fact that you are paying rent somewhere else is of very limited interest to the revenue.

It sounds to me like you should at least talk to an accountant or other competent professional. At the very least you should consult the Revenue's useful leaflet on the subject (available on their website).

RainyDay

kikel wrote:

Hi,
I bought myself a house last year. Now i have to move away for work reasons. Going to be renting out my house. I'm on the higher tax bracket. What tax will i be paying on the rent i receive.
Is it right that i can earn a certain amount tax free?

If you benefited from a stamp duty exemption when purchasing the house as a residential buyer, there may be a clawback if you rent the property within 5 years of purchase. Check out the FAQ's & Key Posts in the Property Investment forum at Askaboutmoney.com for more details.

Victor

Consider keeping the house as you principle residence and rent out rooms under teh Rent-a-Room scheme instead. Keepo your post going there and live there Friday-Sunday.

Maximum income (no expenses allowed) is c.€7,000/year.

Can you get some of your relocation expenses paid by your employer?

RainyDay

Victor wrote:

live there Friday-Sunday.

Hi Victor - Are you sure OP would still qualify for rent-a-room if he was only living there for 2 nights a week?

kikel

RainyDay wrote:

Hi Victor - Are you sure OP would still qualify for rent-a-room if he was only living there for 2 nights a week?

As far as i know this would work but i'd prefer to leave tenents alone. they don't want landlord hanging around.

I have tried ringing the tax office but their crappy automated service keeps hanging up on me. Nuts

Victor

RainyDay wrote:

Hi Victor - Are you sure OP would still qualify for rent-a-room if he was only living there for 2 nights a week?

3 + holidays etc.

It just might make a difference.