Tax Implications of Renting out My House???

Majella.oc

Hi All,

Myself and my partner split last January, we had bought a house and were living in it since 2007. We have since moved home to our parents houses and are renting out the house.

I'm not sure what all the implications of this are, tax wise mostly. I did change our house insurance which I was told was the main thing. Anyone out there in the same position able to advise me???

Thanks

Zamboni

The rental income is subject to tax.
Assuming you have a mortgage on the house you can make a deduction on the mortgage interest paid.
Your TRS is gone as you are no longer in your PPR.
Also, if you are on a tracker this could be taken from you as you are no longer in your PPR. Check the terms of your mortgage.

Majella.oc

Cheers Zamboni for that, how do I go about all this? Go to the Revenue or my mortgage lender? Can I be a total ass & ask what PPR stands for?

Losing TRS & tracker - holy sh*t. . .

ricman

ppr is principal private residence, ie where you live .You fill in a tax form as a landlord, if the mortgage,plus repairs ,insurance is more than rental income your tax bill will be almost zero .Go to revenue ie, search landlord tax , trs .I think you can still claim some trs as a landlord.
You are basically ,taxed on the profit, you make on the house,i know landlords who pay no tax as the mortgage is 20k, rental income is 12k.
Get a self assessment tax form.
see here http://www.irishlandlord.com/
there should be a sticky post,
advice for first time landlords ,renters.
If you live in the house ,you can earn up to ten k ,tax free ,rent a room scheme.

Majella.oc

Ah ok, well believe me there's no profit being made. Mortgage a month is €699 & house insurance is €35. We're only getting €650 in rent. Plus I have to add life assurance & mortgage protection a month onto those.

May go get it all in order though! Thanks a mill for your advice

D3PO

Majella.oc wrote: »

Ah ok, well believe me there's no profit being made. Mortgage a month is €699 & house insurance is €35. We're only getting €650 in rent. Plus I have to add life assurance & mortgage protection a month onto those.

May go get it all in order though! Thanks a mill for your advice

this is a common mistake people make. your returns are not based on turninga profit they are based on rental income recieved.

When doing your returns you cannot write off the €699 what you can write off is 75% of your interest assuming your are properly PRTB registered.

So assumeing interest is €300 per month you can write off €225

so rent 650 minus 225 interest = taxable income of 425 minus other decuctable expenses (not everything is deductable)

Uriel.

OP,

You can deduct the following from the rent received:

75% of the Mortgage Interest Paid. Note that this is only the interest amount and not payments on the principal. Typically interest is debited to the Mortgage account once every quarter. At the end of the year you should also get a statement from your bank outlining the interest paid during the last year. Take 75% of this and deduct it from your rental income.

Deduct insurance policy costs from the rental income - remember to take out landlord specific house insurance.

if you have any mortgage protection cover (i.e. death and/or specified illness cover) - deduct the total yearly policy amount from the rental income.

Other costs such as solicitors/accountant fees incurred for the renting out of the house (if you use them) can be deducted from rental income.

PRTB registration fee (€70) can also be deducted.

If you pay for the bins/esb etc... for the tenants - this can also be deducted.

Any other reasonable costs directly related to renting out the house can be deducted also. Wear and tear on Fixtures and fittings - 12.5% of cost over 8 years.

Don't take on the responsibility of being an amateur landlord lightly. It is not worth it, for the grief to be honest.

Look after your tenants and be fair and reasonable. Register with the PRTB, make sure you have a sound lease agreement, don't try to dodge your tax responsibilities.

Do pay your annual NPPR fee €200 and whatever you do.

If I were you I wouldn't tell your bank specifically that you are renting it out as it has the potential to affect your interest rate. Check your mortgage contract for any clauses relating to this.

Best of luck.