Tax liability on rented property

Citizenpain

Monokne wrote: »

Just thinking about it, given how little rent I get and the cost of repairs, interest, management fees, etc, I doubt I'll be paying much. :-)

Go over to the taxation forum -- loads of info there

sunnysoutheast

Monokne wrote: »

Just thinking about it, given how little rent I get and the cost of repairs, interest, management fees, etc, I doubt I'll be paying much. :-)

Might be worth doing a "proper" return to crystalize losses as these carry forward indefinitely and may reduce tax in future years if you start to rent on a "commercial" basis in future.

Not sure how long you will be able to stay "under the radar" for tax these days.

riclad

first 10 years ,90 per cent of loan payment is interest,
say your loan is ,10k per year,
you can claim around 75 per cent of 9k,
6700 euros approx,as a tax allowance against rental income
10 per cent is capital repayment
.you cant carry forward loss,es unless you have at least 2 rental propertys.

i know someone made no tax return for 5 years, had 4 tenants ,all working on prsi,paye.
never got any letter from tax office re rental income
you dont make a tax return ,what happens when your tenant claims tax allowance on the rent paid,
you might get a 1000 euro fine.
even though your tax liability is 20 euro.

sunnysoutheast

riclad wrote: »

.you cant carry forward loss,es unless you have at least 2 rental propertys.

I don't know where you get this from. Simply not the case.

I have to say that I find your posts almost impossible to read at the best of times.

I carried a watermelon

riclad wrote: »

Any smart person can fill out a tax return,
the hard thing is getting all the reciepts,statements from bank, prtb,
you have to hold onto all documents, reciepts for 5 years for the tax office.
in 20 years you will make a profit anyway, and you,ll have to pay some tax.

Receipts should be held for 6 years after submitting your tax return.

You should really be filing your tax returns and declaring your rent, even if you are not in profit, you still need to declare your loss. Make sure you are registered with the PRTB in order to claim interest relief.
Also if the property has been registered to you for LPT purposes and you are not living in it, Revenue may in the future query how the property was being utilised while you weren't living in it..
Have you been paying the NPPR on the property for the last few years, the penalties for not paying it on time are large. You should have a look at the Revenue guide to rental income on the Revenue website to get a clearer picture of your obligations.

riclad

i Do not see how you can carry forward losses, say 3 years into the future if you just have one property for rent ,
and do not intend to rent out a second one in the future.

At SOME point you may make a profit, according to revenue,
when your loan payments, are composed of more capital payments than interest payments.
you,ll need a statement every year, of interest payments on the loan.
january to december 31st.
sounds like your loan payment is 500 per month,
so your interest is probably 440 approx,
so 75 per cent of 5280, annual interest is allowable against rental income.

of course your interest payments change every year.

i,ve Seen a landlord tax return on 1 rental unit,for the last 4 years,
I see no mention of carried forward ,loss,es .
she makes no taxable profit ,after expenses on the rental income.
ONLY has 1 unit rented out.
rent is half of the mortgage payments.

Citizenpain

S384 of the Tax Consolidations Act

Case V losses ( Rent) can be carried forward - Sure a person might be making lsoses on one property and may never get to use them if that property will never generates a taxable profit

But what if they acquire another property - one that makes a profit -- they can uses the losses carried fwd to offset the tax on this property

Or - say next year they suddenly decide that mortgage interest is no longer deductable or is only 50% deductable on that one property -- the losses b/f might be handy then!

vibe666

Monokne wrote: »

I've just spent €500 repairing the boiler which would count as expenses related to renting it...but never got a receipt! Any idea if they ask for those kinds of things?

yes, get receipts for EVERYTHING!

riclad

YOU have to hold onto all receipts , bank statements for 6 years re rental property,
if i,m giving advice i give it on current rules , laws ,
I can,t predict what the rules will be in 5 or 10 years time,
apart from to say aT some point interest rates will go up.

200 euro receipt could be worth 200 off your tax bill on rental income.
so theres no point in paying for a nixer.

Mrs OBumble

riclad wrote: »

200 euro receipt could be worth 200 100 off your tax bill on rental income.
so theres no point in paying for a nixer.

Fixed that for ya: you don't pay tax on the gross, you pay it on the nett.

So if an expense of 200 reduces your income, then you don't pay the tax on that reduction. Current max rate of tax is approx 50%, so that's a saving of 100. (Even the Irish government hasn't introduced 100% tax as yet. )


And I agree with the point: only an idiot gets a big job done without getting a receipt. Of the job goes wrong, you have no proof that the person did it.