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Tax Liability on Rented Property

  • 24-09-2014 7:57am
    #1
    Registered Users Posts: 816 ✭✭✭


    I am living in Dublin City but hope to 'return' to Kilkenny City in the future. I am going to buy a house now (not impulse, the right house has become available) and rent it for a couple of years before I move home.

    I will register as a landlord and declare it as income. I am on the higher rate of tax (self employed). I will need a mortgage.
    Let us say I will get €610 month rent for the house = 12 x €610 = €7,320 tax per year. Do I need to declare €7,320 extra 'Income' at the end of the tax year and am I then liable for 52% tax on this? Is there any discounts/deductions I can apply?


Comments

  • Registered Users, Registered Users 2 Posts: 260 ✭✭Immy


    Basically you have it right. You can deduct a portion of mortgage interest, any repairs and maintenance and any expense you incur in relation to the property. You could also claim a capital allowance for furniture.

    You take the income minus the expenses and pay 52% on profit.


  • Registered Users, Registered Users 2 Posts: 5,175 ✭✭✭angeldelight


    Any pre-letting expenses (prior to first letting) are disallowed


  • Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    You can set aside 75% of the interest against income and any repairs insurance letting and other expenses


  • Registered Users, Registered Users 2 Posts: 1,908 ✭✭✭mozattack


    Consider valuing fittings etc and aim wear and tear thereon but be realistic with value


  • Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Read the guide to rental income in the stickies


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  • Registered Users Posts: 816 ✭✭✭Jesper


    You can set aside 75% of the interest against income and any repairs insurance letting and other expenses

    For Example
    Variable Mortgage over 15 years = €638.90 (5.15%).

    Rent for a month is going to be around €610.

    So what is 75% of interest in this case?


  • Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Jesper wrote: »
    For Example
    Variable Mortgage over 15 years = €638.90 (5.15%).

    Rent for a month is going to be around €610.

    So what is 75% of interest in this case?

    Step 1: Get an annual interest statement for the mortgage.

    Step 2: Read how much interest it says.

    Step 3: multiply that figure by .75.


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