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Landlord - am I correct in tax calculation?

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  • 08-08-2018 6:58am
    #1
    Hannaho
    Registered Users Posts: 724 ✭✭✭


    I have a property with no mortgage that was rented out for 2017. Rental income 20,124. Profit 16,059 - after agent fees, repairs etc. Taxed at higher rate of tax. I have put away 8k for tax - put away 800 per month from rent. Will this cover my tax bill?


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    #2
    Watergirl4
    Registered Users Posts: 34 ✭Watergirl4


    I have removed my post as it appears I was not correct in my advice

    I do recall paying either USC or PRSI on gross rent but cannot access at the moment)


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    #3
    Bubbaclaus
    Registered Users Posts: 4,461 ✭✭✭Bubbaclaus


    Watergirl4 wrote: »
    USC is chargeable on the gross rent - so could be 8% of 20124 plus 44% of 16059 = €8675.88

    It depends on your marginal rate of USC ( I have assumed 8% above)

    This is incorrect. USC is charged on profit after expenses (but before capital allowances), not gross rent.

    OP, you will also need to consider you will need to pay Preliminary Tax, so your first year of renting tax return you will essentially be paying double.


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    #4
    Baby01032012
    Registered Users Posts: 1,622 ✭✭✭Baby01032012


    Profit has nothing to do with what tax you pay as only 80% of mortgage interest will be allowable, pre letting expenses not allowable, LPt not allowable. Have you taken into account capital allowances? Apart from USC you could be looking at a tax rate of 52% dependent on your non passive income.


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    #5
    iluvfatfrogs
    Registered Users Posts: 616 ✭✭✭iluvfatfrogs


    Hannaho wrote: »
    I have a property with no mortgage that was rented out for 2017. Rental income 20,124. Profit 16,059 - after agent fees, repairs etc. Taxed at higher rate of tax. I have put away 8k for tax - put away 800 per month from rent. Will this cover my tax bill?

    If you have been putting away €800 pm since Jan 2017, then yes you will be fine as you will have enough to cover your tax bill for 2017 (due Oct 18) and your preliminary tax for 2018 (also due Oct 18), give or take.

    As it is mortgage free, mortgage interest does not come in to play.


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