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Tax on rental profits

  • 31-10-2009 10:50pm
    #1
    blast05
    Closed Accounts Posts: 256 ✭✭


    Hi,

    I was filling out details on the NPPR website last night to pay the €200 tax on second homes. One thing caught my eye was the way you could enter the address and owner of the property (this being a NPPR) as a corporate address owned by a company.
    So, take a PAYE employee who owns a rental property with no mortgage - they will have to pay 41% tax on all rental incomes (minus whatever expenses). Does a person who has their NPPR('s) down as owned by a company in comparison only have to pay 12.5% on profits (minus expenses) ???


Comments

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


    The 200 charge applies to companies and individuals equally.

    You are looking at this the wrong way- in fact- discussing hypotheticals. Yes a comapnay will pay a lower rate on rental income but not at 12.5% - there is a separate rate for rental income companies.


  • #3
    Carpenter
    Registered Users, Registered Users 2 Posts: 2,683 ✭✭✭Carpenter


    Mr. Incognito wrote: »
    The 200 charge applies to companies and individuals equally.

    You are looking at this the wrong way- in fact- discussing hypotheticals. Yes a comapnay will pay a lower rate on rental income but not at 12.5% - there is a separate rate for rental income companies.

    HI
    So if I had a house with nothing outstanding on it what rate of tax would I have to pay on it ?????


  • #4
    blast05
    Closed Accounts Posts: 256 ✭✭blast05


    Carpenter wrote: »
    HI
    So if I had a house with nothing outstanding on it what rate of tax would I have to pay on it ?????
    Bump ...... anyone ?


  • #5
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    You would pay the flat 200 charge and then pay tax on the rental income on your marginal rate.

    Just to burst your company bubble you would have to pay 25% Corporation tax and THEN tax at your marginal rate when you extract the cash from the company.


  • #6
    SaschaKyiv
    Closed Accounts Posts: 29 ✭SaschaKyiv


    I agree with Mr. Incognito..

    And then when you go to sell the property any gain that you make will first be taxed in the hands of the company and then usually be further taxed when you extract the money from the company...


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  • #7
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    For a company there is also an additional surcharge on undistributed rental income of 20%. Having property in a company is generally a very bad idea.


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