Rent a Room on House I Won't Live In For 8 - 12 Months

Claw Hammer

If the Revenue notice that a person is claiming rent a room relief in circumstances where they work a long way from the property, they will carry out enquiries. If it turns out that there is evidence that the person only visited the house sporadically, they will charge the tax on the income and add interest an penalties. It will then be up to the taxpayer to appeal. The onus will be on the taxpayer to refute the assertion that it was their main residence.

Franz Von Peppercorn

lawred2 wrote: »

I'd be surprised if the technical description as used by the revenue is being communicated here.. I wonder is it some sort of 'de common people' speak

No they are trying to avoid specifics (ie where your post goes because you can change that).

Captainsatnav

Ok - so thanks for contributions folks - I'm not trying to evade tax here at all!

So if I were to buy the gaf (as a first time buyer), my only option really is to rent it out as a landlord and try to get a rent that covers the mortgage (as will be paying bl00dy mental rent in Dublin as well!)

Fian

Captainsatnav wrote: »

Ok - so thanks for contributions folks - I'm not trying to evade tax here at all!

So if I were to buy the gaf (as a first time buyer), my only option really is to rent it out as a landlord and try to get a rent that covers the mortgage (as will be paying bl00dy mental rent in Dublin as well!)

In those circusmtances you need to pay tax on the income (not Profit!) you receive in rent. You can't set off the rent you pay in dublin or the mortgage repayments either. You can set off 80% of the interest you pay on your mortgage. To cover the mortgage payments without subsidising them from other income you probably need about twice the mortgage paymetns in rent.

By way of illustration I rent out two places for (almost) equal rent. One set of rent payments goes into my current account and helps pay for the mortgages that come out of that every month. One goes to a seperate account and sits there to cover expenses/management fees/repairs and tax paymetns in November. The rent on one place obviously doesn't cover the mortgage on two, my salary also feeds into that account and subsidises those payments. The rent on the other place is generally enough to just about cover the taxes and normal expenses, not things like replacing appliances though.

I'm not complaining btw, eventually, in a couple of decades, the mortgages will be paid off and I will have two valuable assets, so I expect to have to put my hand into my own pockets to pay for them rather than have my tenants buy them for me.

Captainsatnav

Fian wrote: »

In those circusmtances you need to pay tax on the income (not Profit!) you receive in rent. You can't set off the rent you pay in dublin or the mortgage repayments either. You can set off 80% of the interest you pay on your mortgage. To cover the mortgage payments without subsidising them from other income you probably need about twice the mortgage paymetns in rent.

By way of illustration I rent out two places for (almost) equal rent. One set of rent payments goes into my current account and helps pay for the mortgages that come out of that every month. One goes to a seperate account and sits there to cover expenses/management fees/repairs and tax paymetns in November. The rent on one place obviously doesn't cover the mortgage on two, my salary also feeds into that account and subsidises those payments. The rent on the other place is generally enough to just about cover the taxes and normal expenses, not things like replacing appliances though.

I'm not complaining btw, eventually, in a couple of decades, the mortgages will be paid off and I will have two valuable assets, so I expect to have to put my hand into my own pockets to pay for them rather than have my tenants buy them for me.

Right then so essentially there's no point buying a house in Cork until I'm ready to move into it.

4ensic15

Captainsatnav wrote: »

Right then so essentially there's no point buying a house in Cork until I'm ready to move into it.

House prices in Cork might be higher in 12-18 months time. You could end up with a higher mortgage, or an inferior house when you eventually move there.

Captainsatnav

Spoke with mortgage advisor today - dream's over. Apparently I'd need to be working & living in Cork before applying for a mortgage on a place there. FFS - means I'll need to move in with parents before applying as well as quitting job in Dublin, finding new one in Cork and waiting 6 months to pass probation.

Samuel T. Cogley

Captainsatnav wrote: »

Spoke with mortgage advisor today - dream's over. Apparently I'd need to be working & living in Cork before applying for a mortgage on a place there. FFS - means I'll need to move in with parents before applying as well as quitting job in Dublin, finding new one in Cork and waiting 6 months to pass probation.

This a broker or the bank directly? If the bank have you approached anyone else?

Captainsatnav

Samuel T. Cogley wrote: »

This a broker or the bank directly? If the bank have you approached anyone else?

Broker. Only option would be a buy to let mortgage but that's 70%ltv ratio.

Claw Hammer

Why bother moving to Cork at all then?

Captainsatnav

Claw Hammer wrote: »

Why bother moving to Cork at all then?

Is that a serious comment? I don't want to pay stupid money for a crap house in Dublin and I want a better quality of life out of the rat race sitting in traffic all day.

Claw Hammer

Captainsatnav wrote: »

Is that a serious comment? I don't want to pay stupid money for a crap house in Dublin and I want a better quality of life out of the rat race sitting in traffic all day.

Money isn't stupid. If you don't want to live in Dubin, there are lots of places besides Cork.

Samuel T. Cogley

LOL asking a Cork man (presumably) why he wants to live in Cork. Cork people love Cork unconditionally.

The_Conductor

Samuel T. Cogley wrote: »

LOL asking a Cork man (presumably) why he wants to live in Cork. Cork people love Cork unconditionally.

Depends- there is very little that is unconditional in life anymore........

I think the OP has satisfied themselves that their proposal is a non-runner- on financial grounds alone (never mind the mayhem of letting out separate bedrooms- possible Part IV tenancies etc etc).

Unless the OP would like discussion to continue- I am closing the thread.