Inherited a house.

Pawwed Rig

Exactly but it is something which the OP needs to consider in that tax in Ireland may not be the end of the matter along with the cost of paying a tax advisor in both countries should it be required and the hassle of filing 2 returns.

nompere

The_Conductor wrote: »

You would offset your UK tax against the Irish tax paid- we have reciprochal tax arrangements (as we have with all EU countries- and numerous other countries). So- its not a double tax- you'd simple pay the same amount gross- that you'd have done in the first instance, were the tax earned in the country of tax residence.

That's not necessarily true.

The nature of double tax treaties is generally that relief is given at the lower of the two average rates that apply.

So if rents are taxed at 20% in the country where the property is situated, but the taxpayer has an average tax rate of only 10% where he is resident, then the maximum double tax relief will be limited to that 10% - leaving half the foreign tax being unrelieved.

The_Conductor

Ok- we're going off the reservation discussing tax law here.......
OP- suffice to say- you'd need to do a tax return in both countries- and if you had a professional prepare the returns for you in year 1- you could then use that as a template going forwards (subject to ensuring you were compliant with any changes in tax regimes and implementations that occur in the intervening period of time).

DublinWriter

OP - is your solicitor charging a percentage of the estate for probate fees?

lcwill

There are a number of things that would make me think you should rent it out for a few years:

1) you can probably find a decent professional family to rent it who will stay at least a few years so not too much hassle is you also get a good agent to manage it. You will also get some experience of being a landlord and see if a buy to let in the UK would be a good investment for you in future

2) after expenses and taxes you should get around 500 euro a month in profit so better than nothing

3) Irish house prices are increasing from extreme lows so its likely you can sell for more in a few years

4) London house prices are at the top of a boom which has some chance of popping or at least limited potential to keep increasing in the next few years

5) stocks are pretty expensive with a lot of uncertainty around the world so not ideal time to invest a large lump sum.

6) the euro is very weak against sterling at the moment.

In sum: keep it and rent it out but the returns from this investment will come through relatively faster increases in Irish house prices than UK house prices, and the possibility to convert your Euros at a better rate in future to invest in sterling denominated assets after they have fallen from current peaks.

antoinolachtnai

If I were the OP, I would do something. The worst thing is to do nothing.

I mean I would either sell it or get it rented. Avoid leaving the property unoccupied for a long period if you can at all. Even if you make very little money there will at least be some cash to maintain things and the property will be watched and kept warm.

If you sell up I wouldn't completely discount the idea of spending some or even all of the money if there is something worthwhile and significant you want to do. I agree it is not a good idea to slowly fritter it away in dribs and drabs. That is the worst thing of all to do.

mad m

What about selling the property, and put it in Irish government saving scheme. For instance 120k (max) over 10years gets you 25% return so 30k return ain't bad....buy some prize bonds with rest. If you need money then there is no problem to get it.

http://www.statesavings.ie/products/Pages/NationalSolidarityBond.aspx

http://www.statesavings.ie/Pages/NoLimitonSavings.aspx

http://www.statesavings.ie/PrizeBonds/Pages/HowToPurchase.aspx

handlemaster

lcwill wrote: »

There are a number of things that would make me think you should rent it out for a few years:

1) you can probably find a decent professional family to rent it who will stay at least a few years so not too much hassle is you also get a good agent to manage it. You will also get some experience of being a landlord and see if a buy to let in the UK would be a good investment for you in future

2) after expenses and taxes you should get around 500 euro a month in profit so better than nothing

3) Irish house prices are increasing from extreme lows so its likely you can sell for more in a few years

4) London house prices are at the top of a boom which has some chance of popping or at least limited potential to keep increasing in the next few years

5) stocks are pretty expensive with a lot of uncertainty around the world so not ideal time to invest a large lump sum.

6) the euro is very weak against sterling at the moment.

In sum: keep it and rent it out but the returns from this investment will come through relatively faster increases in Irish house prices than UK house prices, and the possibility to convert your Euros at a better rate in future to invest in sterling denominated assets after they have fallen from current peaks.

The first point is telling. .. Probably find .... I tell you theres a gamble . You never really know what your going to get . The value of the property and the return via rental dont make it worth the risk.

imitation

I think you would be certifiable to try and rent it out, I think being a landlord is only worth it if you live near and are fond of DIY and live next door. If you are 24 and living in London the last thing you want to be doing is entertaining tenants complaints every evening, and then having to sort and pay for an electrician just to flick a circuit breaker, fighting about who pays irish water etc. Sure there are some excellent tenants who will take care of everything, but I think you would be lucky to get those. Then there is always the risk of getting really bad tenants who will wreck the place, and take 6 months rent free to get rid of.

Its a pity about the exchange rate - but the reality is that its gone back to what it was 10 years ago, and I think its likely it will stay that way for a good few years (although its a chance like everything). Getting on the property ladder in London is probably the best choice, anything else pretty much involves messing around with dodgy markets

dockleaf

Don't understand how someone living and working in London could qualify for dwellinghouse exemption or favourite nephew/niece relief? And the OP said their family were not irish, so presumably this is not an inheritance from a parent. Very strange how there is no CAT in the circumstances.

athtrasna

Please take the inheritance tax opinion and discussion to the taxation forum

Mod

daveville30

Keep it for a year or two till you have a plan.a good estate agent can look after everything for you.

Head_Hunter

athtrasna wrote: »

Rental tax is significant here and without a mortgage you lose one of your biggest income tax reliefs (75% of mortgage interest is deductible).

Is mortgage interest relief not gone since 2012?
http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_interest_relief.html

Michael D Not Higgins

Head_Hunter wrote: »

Is mortgage interest relief not gone since 2012?
http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_interest_relief.html

It's not mortgage interest relief, it's the tax deductible amount of the mortgage interest for BTL properties.

danotroy

Hello all,

Thanks for the advice to date. Let me first deal with the issue about inheritance tax - It was my father who passed therefore I had no inheritance tax to pay.

I spent the last week back home tying up loose ends with the solicitor and spent a few days clearing out the house. I have deicded that I am too attached to the property to sell it and I have been thinking of moving back in a few years anyway so I am putting some serious thought into becoming a landlord.

I have no mortgage on the property and I looked around when I was at home and houses of the same type in the same estate are now renting at 900-1000 making renting a more appealing prospect.

I have taken on board the comments on the gamble you take with tenants but I want to keep the property but I dont wan't it to be empty. I have spoken with my fathers bestfriend, who also happens to be my godfather and nearly next door neighbour to the property. He has offered to take care of maintenance/small requests by potential tenants, luckily he is a caretaker in a local school.

What I want to know from your collective extensive knowledge is what to do

Can I appoint an estate agent to manage the property? i.e if the tenant has a leak they ring the estate agent and the estate agent then rings my godfather to sort issue he sorts the issues.

How much does a letting management service with an estate agent cost? is this cost tax deductable?

What other taxes would I be liable for as I am a non resident living in the UK. i'm not after direct tax advice and wont rely on anything said in this thread without checking with my accountant, i just want to know the background before I approach one.

gaius c

If anybody was thinking of getting into letting, I'd advise them to either be near the property(ies) they are letting out or be prepared to spend a lot of time travelling to the property. Being an absentee landlord is asking for trouble.

It's either that or find a good agent and really if you want something done right, you need to do it yourself.

Evil-p

My last rental was managed by a property agent. I never saw or spoke to the landlord in the 3 years we lived there. If there was an issue the agent used their own contractors to fix it. As far as I know it was set fee from the LL to the agent per month from our rent. The agent also arranged the viewings when the house was vacant and checked our employments etc. I think it would be exact way to go if you are to continue living away.

Michael D Not Higgins

gaius c wrote: »

If anybody was thinking of getting into letting, I'd advise them to either be near the property(ies) they are letting out or be prepared to spend a lot of time travelling to the property. Being an absentee landlord is asking for trouble.

It's either that or find a good agent and really if you want something done right, you need to do it yourself.

Obviously the more you want the agent to do the more it'll cost you as well.

OP keep in mind that even though it's tax deductible, you're only saving the tax amount. Since you're abroad, your tax could be lower (not sure on the details, you'd need to speak to a tax accountant), maybe even around 25%.

Let's say the agent costs you 3k a year, you'll only save 750 of that from the tax deduction.

Spanish Eyes

Don't forget also, that a tenant in an absentee landlord situation is obliged under Revenue rules to deduct tax at source and pay Revenue. Extract from Revenue website under Rental Income here -

Additional Information

Rents outside the State - Rental income arising outside the State is chargeable to tax under Schedule D Case III.

Pre-letting Expenditure - No relief is due for pre-letting expenditure except for auctioneers letting fees, advertising fees and legal expenses incurred on first lettings.

Rent paid to non-resident landlord - If the rent is paid to an agent acting on behalf of a landlord, the agent is assessed on the rent.

C.G.T. - If let property is sold a liability to C.G.T may arise.

If however the rent is paid to a landlord abroad or to an account on their behalf, the tenant must deduct tax at the standard rate from the payments and remit that tax to Revenue.

Tax on the rental income will be payable in both jurisdictions, with a Double Tax credit applied by the country of residence of the landlord.

4ensic15

You are also a long way from the property. All maintenance will cost top dollar.
If you lived nearby you could deal with minor maintenance issues yourself. Also, many people have bad experiences with agents and tenants. In competent and dishonest agents are a curse as well as possible having to go to the PRTB. Sell up.

gaius c

gaius c wrote: »

If anybody was thinking of getting into letting, I'd advise them to either be near the property(ies) they are letting out or be prepared to spend a lot of time travelling to the property. Being an absentee landlord is asking for trouble.

It's either that or find a good agent and really if you want something done right, you need to do it yourself.

I don't know any place I've lived the LL might be seen once a year if even it was no hassle at all for them and they have always lived near by. I'm 2.5 years in my current place and have never met the LL he has been to the house twice since I moved there (comes once a year to weed the garden and cut hedges) and I told him to let himself in as I wasn't around.

If something goes wrong which is rare once a year maybe he just rings a plumber or electrician that he uses and they deal with me or another housemate from there. Is basically no work whatsoever renting the house, aside from a few phone call in the year.

The amount of work involved in being a LL gets highly exaggerated at times from my experience.

gaius c

Baylee Drab Shipyard wrote: »

I don't know any place I've lived the LL might be seen once a year if even it was no hassle at all for them and they have always lived near by. I'm 2.5 years in my current place and have never met the LL he has been to the house twice since I moved there (comes once a year to weed the garden and cut hedges) and I told him to let himself in as I wasn't around.

If something goes wrong which is rare once a year maybe he just rings a plumber electrician that he uses and they deal with me or another housemate from there. Is basically no work whatsoever renting the house, aside from a few phone call in the year.

The amount of work involved in being a LL getting highly exaggerated at times from my experience.

You're talking from the tenant point of view and you were obviously an excellent tenant so low workload for your landlord.
Have you ever been a landlord?

Managing from a distance or by remote control is a risk and any prospective landlord would do well to factor that risk into their calculations.

gaius c

gaius c wrote: »

You're talking from the tenant point of view and you were obviously an excellent tenant so low workload for your landlord.
Have you ever been a landlord?

Managing from a distance or by remote control is a risk and any prospective landlord would do well to factor that risk into their calculations.

I agree it's a risk but it's not guaranteed to be the really difficult job that is often suggested either. If tenants are chosen wisely, any obvious jobs or maintenance are done pre letting and you organise with a local plumber, electrician etc that they will do work for you then you can reduce the risk.

The op has also said he has someone to keep an eye on the place and do bits and pieces of maintenance which further reduced potential hassle of the LL.

I wouldn't say the reason my LLs haven't had much work is that I'm a good tenant (which I would consider myself) it's just that things haven't needed doing very often.

Graces7

"The op has also said he has someone to keep an eye on the place and do bits and pieces of maintenance which further reduced potential hassle of the LL." quote from Jayde Gentle Mailmans post

I think folk overlooked this.. OP try it. Choose tenants carefully. References and size them up; worth being there to do that. Like Jayde Gentle Mailman I am a good tenant and trusted by my landlord. We are not all bad even those like me on rent allowance. Establish clearly also what inspections you propose done.

grindle

It's pretty easy to find good tenants in Ballincollig nowadays - most prospective tenants are foreign professionals in their mid-to-late 20s who've landed a job in either EMC or the ever-expanding VMware.
If renting, be careful you don't price yourself too low as prices in Ballincollig are pretty much on par with Cork city due to the convenience for tech-staffers and their high pay - 3-beds are going for 1100+.

Mrs OBumble

OP, if you use an agent (which I strongly recommend - choose one who only manages rental properties, not an estate agent who does rentals as a side business), then you have to use their handyman not your own.

Also, if the rent is paid to a local agent, then the tenant does not have deduct tax on it themselves.

Make sure that maintenance is done; that the agent and tenant understand that you want to keep the property in good condition.

njs030

gaius c wrote: »

You're talking from the tenant point of view and you were obviously an excellent tenant so low workload for your landlord.
Have you ever been a landlord?

Managing from a distance or by remote control is a risk and any prospective landlord would do well to factor that risk into their calculations.

I've lived in my house for 5 years and the landlord has just arranged a date to come and do some maintenance....it's his third visit in my entire tenancy.
I'd say in that time I've had a handy man come out 5-6 times to do little jobs and a fridge replaced.

I'd agree it's not anywhere near as hard as is being made out - my landlord lives 2-3 hours away.