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Landlord query

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  • 17-07-2019 12:47pm
    #1
    Looly8726
    Registered Users Posts: 43 ✭


    background:
    House was a family home for many years but was bought solely in husbands name. No mortgage.
    Now we have bought a new house, and plan to keep the first house as a rental.

    If house is in husbands name, will all the rental income be put on top of his income?
    If wife is added to deed of house will the rental income be halved between both owners?
    Also,
    Can the interest on a loan (not a mortgage) taken to do up a rental property be offset against rental income?
    Thanks in advance.


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    #2
    steamsey
    Registered Users Posts: 686 ✭✭✭steamsey


    If house is in husbands name, will all the rental income be put on top of his income?
    Yes

    If wife is added to deed of house will the rental income be halved between both owners?
    Yes

    But above assumes individual assessment - if you are not joint assessed might be worth considering depending on both of your income levels

    Also,
    Can the interest on a loan (not a mortgage) taken to do up a rental property be offset against rental income?
    No - pre letting expenses are not allowed BUT
    Some exceptions exist - check this doc - https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-08-11.pdf
    Thanks in advance.


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    #3
    Looly8726
    Registered Users Posts: 43 ✭Looly8726


    steamsey wrote: »
    If house is in husbands name, will all the rental income be put on top of his income?
    Yes

    If wife is added to deed of house will the rental income be halved between both owners?
    Yes

    But above assumes individual assessment - if you are not joint assessed might be worth considering depending on both of your income levels

    Also,
    Can the interest on a loan (not a mortgage) taken to do up a rental property be offset against rental income?
    No - pre letting expenses are not allowed BUT
    Some exceptions exist - check this doc - https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-08-11.pdf
    Thanks in advance.

    Thank you.
    On the flip side, if we are jointly assessed and wife is much lower earner would it make sense up put the house into wife’s name??

    With regards to the loan, if this was taken out after the house was leased would the interest be tax deductible? Edit to add, it would be to cover the cost of new heating system and some other cosmetic work that could be done with tenants in situ.


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    #4
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,549 Mod ✭✭✭✭Gumbo


    Looly8726 wrote: »
    Thank you.
    On the flip side, if we are jointly assessed and wife is much lower earner would it make sense up put the house into wife’s name??

    With regards to the loan, if this was taken out after the house was leased would the interest be tax deductible? Edit to add, it would be to cover the cost of new heating system and some other cosmetic work that could be done with tenants in situ.

    Get your accountant to do a cost projection and projection of tax due after year 1.
    I done that and it determined which way to split our tax credits etc


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    #5
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Have you run a cost analysis of having no rent for two years, 20K in legal fees and 20K in damage. Are you prepared for that level of risk? Becoming a Landlord is a risky proposition. If the house is free and clear mortgagewise have you considered selling and investing the money - how do the returns on that stack up against a rental income?


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