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Paying tax on rental income

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  • 01-03-2011 4:55pm
    #1
    lil_mo
    Registered Users Posts: 8 ✭


    Hiya !

    I need some help on this one guys!

    I bought a one bed apartment in 2007 moved in and in 2010 I was told I was loosing my job.

    Nervous and knowing I was unable to sell the property I moved home to the mammy.

    I rented out the apartment myself for under the local rent average and got myself a lovely tennant that has really looked after the place.

    PROBLEM : hes called me today looking for my PPS number so he can claim tax back

    Ive just found out that maybe I should have looked into being a landlord a little more before renting it out.

    What should I do now?

    Should I register for this PRTB thing?

    Ive actually got a new job & was looking to move back into the property myself in the next few weeks and was due to give him his notice in a week anyways!

    Does anyone know if I earned €27553.25 last year and €7800 (€650 monthly)on rental income how much tax would I have to pay?

    Go easy on me - 1st time in my life ill admit to being thick!


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    #2
    Mongarra
    Registered Users Posts: 1,119 ✭✭✭Mongarra


    Firstly , you should have registered with the PRTB as soon as you rented the property. You could still by paying late fee on top of original.

    Secondly, if the tenancy is registered with the PRTB you can claim 75% of the interest on the loan to purchase it against the rental income. If not, you cannot calim the interest.

    Thirdly, assuming you are single (going back to mammy is a good hint!) you will probably have paid about €1850 income tax on your PAYE income. The total Income tax on PAYE and rental income (ignoring any expenses against the rent) would be approximately €3410, so you will owe approx. €1560. Then there is the Income Levy of 2% on the €7800, another €360, so that's €1920.

    If you register with PRTB you can claim the interest as above, and you probably have management fees and maybe waste disposal, a bit of motor expenses and telephone, some repairs and Capital allowances (wear and tear) of 12 and a half % of the cost of furniture, elec. equip and carpets. These will all reduce the taxable figure by 20% of the amounts involved.

    Because 2010 was the first year of the rent your tax position is ok. Your tax return for 2010 will be due by 31st October next.


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