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TRS on rental property

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  • 30-03-2008 1:16am
    #1
    candlehalo
    Closed Accounts Posts: 15 ✭


    I am about to become a landlord for the first time and wondering if anyone can awnser this question I have.
    I will be renting out apartment that I own and moving back to my parents house. At the moment I get TRS on my fixed rate mortgage, does that change when the property is rented out or lets say in 6 months time I buy a second property, leaving the first rented out is that when the TRS moves to the second property. If I lose the TRS then the rent doesn't cover the mortgage so trying to consider my options.....


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    As your property will become an investment property, you are legally obliged to notify the Revenue Commissioners and the Bank about the change in status of the property, and will no longer be entitled to TRS on the mortgage interest. You will however be entitled to deduct the mortgage interest (note: interest- no capital repayments) from the total of your rental income (along with other allowable costs) before determination of your taxable income. You will have to register the property and subsequent tenancies with the PRTB and make an annual tax return paying tax on the rental income.

    You are only allowed to claim TRS on your PPR (principle private residence)- which when you move back to your parents house will be their house, and not the apartment that you own. If you buy a subsequent house/apartment down the road and live in it- you will be entitled to TRS on it for the initial period (however at the lower rate, as you'll no longer be a First Time Buyer).


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    #3
    candlehalo
    Closed Accounts Posts: 15 ✭candlehalo


    Cheers for that explainiation, I'll go make those calls to the revenue etc.
    thanks


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    #4
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Another thing to keep in mind is that depending on when you purchased the property, there could also be stamp duty implications (as you may be treated as an investor rather than a First Time Buyer and there could be a proportional clawback to be paid, depending on when you purchased it, and for how long you lived in it).

    S.


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