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Buying to let - Cavan

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  • 22-08-2013 10:28am
    #1
    aido79
    Registered Users Posts: 5,374 ✭✭✭


    Just looking for advice. I'm currently considering buying a house in cavan with the intention of letting it out. There seems to be a good rental market at the minute so don't think there would be much of a problem in finding tenants. I'm living in Australia so I'm wondering what sort of tax I would have to pay on any rental income.


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    #2
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    aido79 wrote: »
    Just looking for advice. I'm currently considering buying a house in cavan with the intention of letting it out. There seems to be a good rental market at the minute so don't think there would be much of a problem in finding tenants. I'm living in Australia so I'm wondering what sort of tax I would have to pay on any rental income.


    why cavan ? Dublin would be a better option . I think its 20% up to 36k after allowable expenses but I stand to be corrected. So if you can earn up to that amount in the country. try www.askaboutmoney.com


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    #3
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    handlemaster wrote: »
    why cavan ? Dublin would be a better option . I think its 20% up to 36k after allowable expenses but I stand to be corrected. So if you can earn up to that amount in the country. try www.askaboutmoney.com

    I'm from cavan. I realise that Dublin would be a better option but it is out of my price range. The house that I am considering buying is incomplete and I can get the work done to finish it at a very fair price through family. I'll have a look at that website. Thanks.


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    #4
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Does anyone know what the tax implications would be in this situation. Will I have to pay tax on money brought into Ireland from Australia to purchase the house and would I be expected to pay tac in both Ireland and Australia on any rental income received?


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    #5
    Mrs OBumble
    Registered Users Posts: 25,950 ✭✭✭✭Mrs OBumble


    Unless you have a local management agent, then your tenant willl have to deduct 20% tax from the rent, and forward it to Revenue (actually, Revenue usually manage it by adjusting the tax on the tenant's income during the year).

    You'd be best asking an Australian accountant about their tax rules. But my guess if that you'll get a tax credit there for any tax you pay on the income here.


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    #6
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Mrs OBumble wrote: »
    Unless you have a local management agent, then your tenant willl have to deduct 20% tax from the rent, and forward it to Revenue (actually, Revenue usually manage it by adjusting the tax on the tenant's income during the year).

    You'd be best asking an Australian accountant about their tax rules. But my guess if that you'll get a tax credit there for any tax you pay on the income here.

    Thanks. I would be going through a local agent. I will get in touch with an accountant in Australia for more information.


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    #7
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,380 CMod ✭✭✭✭Pawwed Rig


    I would suggest holding off as prices on property in Cavan are still flling. WRT tax it would very much depend on how much you were going to borrow. I would say with (for example) a 70-90%% mortgage you would be unlikely to pay too much tax considering you will need to pay an agent, PRTB, property tax etc and your rental income wil be only 4-500 per month.

    Havig said that there is a CGT exemption available for those brave enough to buy property now

    Have a read of http://www.revenue.ie/en/practitioner/law/double/australia.html


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    #8
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Pawwed Rig wrote: »
    I would suggest holding off as prices on property in Cavan are still flling. WRT tax it would very much depend on how much you were going to borrow. I would say with (for example) a 70-90%% mortgage you would be unlikely to pay too much tax considering you will need to pay an agent, PRTB, property tax etc and your rental income wil be only 4-500 per month.
    The
    Havig said that there is a CGT exemption available for those brave enough to buy property now

    Have a read of http://www.revenue.ie/en/practitioner/law/double/australia.html

    I wouldn't be getting a mortgage as I will be paying cash. As such I would be hoping to get it for less than the asking price. The property has been on the market for quite a while too. I will have a look at that link. Thanks.


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    #9
    Sun in Capri
    Registered Users Posts: 211 ✭✭Sun in Capri


    From experience I think you may find it difficult to rent out a property in Cavan easily.


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    #10
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,380 CMod ✭✭✭✭Pawwed Rig


    aido79 wrote: »
    I wouldn't be getting a mortgage as I will be paying cash. As such I would be hoping to get it for less than the asking price. The property has been on the market for quite a while too. I will have a look at that link. Thanks.

    You will almost certainly have a tax liability in that case. What are deposit interest rates like now in Australia? It may be the case that you would get a higher yield for your cash there than investing in risky property area like Cavan


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    #11
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Sun in Capri wrote: »
    From experience I think you may find it difficult to rent out a property in Cavan easily.

    What part of cavan has your experience been in?


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    #12
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Pawwed Rig wrote: »
    You will almost certainly have a tax liability in that case. What are deposit interest rates like now in Australia? It may be the case that you would get a higher yield for your cash there than investing in risky property area like Cavan

    Ok. But do you know how much? I am buying the property for €40k and hoping to get it finished for another €20k. It's a 4 bedroom house so can't imagine it could ever fall below €60k in value. Similar houses in the area are on the market for between €140-€ 150k.


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    #13
    aido79
    Registered Users Posts: 5,374 ✭✭✭aido79


    Pawwed Rig wrote: »
    You will almost certainly have a tax liability in that case. What are deposit interest rates like now in Australia? It may be the case that you would get a higher yield for your cash there than investing in risky property area like Cavan

    Ok. But do you know how much? I am buying the property for €40K and hoping to get it finished for another €20k. It's a 4 bedroom house so don't think it could fall below €60k in value. Similar houses in the area are on the market for between €140-€150k.


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    #14
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    aido79 wrote: »
    I'm from cavan. I realise that Dublin would be a better option but it is out of my price range. The house that I am considering buying is incomplete and I can get the work done to finish it at a very fair price through family. I'll have a look at that website. Thanks.

    you would be far better to buy something like this if its investment you want. Cavan will still be Cavan after you buy not much demand and a poor employment area

    http://www.daft.ie/searchsale.daft?id=728262


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    #15
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,380 CMod ✭✭✭✭Pawwed Rig


    aido79 wrote: »
    Ok. But do you know how much? I am buying the property for €40K and hoping to get it finished for another €20k. It's a 4 bedroom house so don't think it could fall below €60k in value. Similar houses in the area are on the market for between €140-€150k.

    Seems like a good opportunity to buy complete and then sell. You could make 60-70K on the transaction. You will get maybe €500 (max) rent for it? 70,000/500 = alot of years

    I would not even attempt to calculate your tax. There are just way too many variables to give you an accurate figure.


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