Renting out property for a year

chocfan

Hi all

We (2+2) are heading to New Zealand for a year for my husband's job.
We own a house in Dublin and will need to rent it out for the year. I'm just not sure what the first step would be and would appreciate advice from anybody who was in a similar situation.

I understand if it's all done above board that we would have to pay tax on the rent-people have quoted 20% or 40% and I can't seem to find a proper figure online. I also understand we'd have to register with the PRTB-is there also a fee for this?

A friend suggested I could just do it all unofficially and rent to somebody I know, thus avoiding tax etc. I have lots of people that would be able to rent for the year but am a bit reluctant to do this-I don't tend to be a rule-breaker and would be afraid of getting caught by Revenue!

Also do people usually go through an estate agent and have them handle any maintenance issues etc? Also do insurance companies tend to charge more if you're renting out a property as opposed to living in it yourself?

Going by rents in property around, we could probably ask for about €2600. I'd be willing to charge less than this just to get the right tenants but would have to charge around this in order to be able to afford the tax etc. The money in NZ won't be great but it's a really good opportunity to further his career. I'd be hoping to break even on costs at home with paying the mortgage and covering tax/insurance etc

Thanks-would appreciate any advice

CF

The_Conductor

Chocfan- I'd seriously advise against letting your home.
A 1 year lease means absolutely nothing- it is only enforceable on the part of the tenant, not the landlord.
Your tenancy would be governed by the strict terms of the 2014 Residential Tenancies Act (as amended)- which states that a tenant is automatically entitled to a 6 year lease, once they have been present in the property for 6 months. There are specific break clauses- including you needing the property for personal use, however, if a tenant were unable to find suitable accommodation in the vicinity- they could draw out the process of vacating the property for 2 years +

The regulatory regime for letting property in Ireland- is to protect the tenant at all costs- the fact that you do everything by the book, does not insulate you from any tenant who may, through no fault of their own, fail to find alternate accommodation when you want your home back.

Some sort of a conservator agreement- whereby you allow someone to stay in the property rent free- in exchange for taking care of the property- on a strict 1 year schedule- is probably your best bet.

I would strongly advise against letting a property for 1 year- if you need the property back again after that.

Zenify

All great advice from The_Conductor. You mention renting to someone you know and not paying tax. Why not renting to someone you know and pay tax? As long as you can completely trust them to vacate on your return.

Zulu

It's an especially tricky question, but The_Conductor has highlighted the major risk - that the tenant doesnt find another place to move to and decides to stay.

There is no sign of the market improving so a desperate renter will promise you the stars to agree the lease, but where will they live in 12 months?

If you have someone you can trust I'd reach out to revenue - they are very helpful on their help lines and will talk you through everything. You need to register with the RTB within a few months of signing the lease at a cost of €90 (see https://onestopshop.rtb.ie/register-a-tenancy/registration-fees/). Although they are feckin useless....

Mrs OBumble

And yes, insurance will cost more, and you absolutely do have to tell your insurance company about the situation

Graham

While an overholding tenant is a risk with any rental property, it is worth keeping in mind that thousands of tenancies end amicably every year without the tenant/s overholding.

MacDanger

Renting to someone you know is your best bet, it means you shouldn't have any problem with getting the property back and they'll also be more likely (you'd hope) to take care of the house

Good luck in NZ

terrydel

Doing it unofficially is breaking the law.
Don't mind the scare stories, I've had a couple of times where I told a tenant they can only have the place for a year tops and when it came time to ask them to move, they did so no hassle.
If you read on here, you'd think there is an epidemic of overholding/bad tenants which is blatantly untrue. Make sure you vet your prospective tenants and I'd be fairly certain it will all work out fine.

terrydel

Graham wrote: »

While an overholding tenant is a risk with any rental property, it is worth keeping in mind that thousands of tenancies end amicably every year without the tenant/s overholding.

The vast majority do.

James Bond Junior

Currently in the situation you describe, house is let whilst we live abroad. My tenants are under no illusions I may be back after a year or so. I have handed it all over to an agent, they deal with the crap. They also vetted the tenants and because the phone started to hop as soon as the ad went live she had plenty of people to choose from.

What I would recommend is to contact revenue and let them no you want split year treatment for tax. I did it all online and having left on the XXth of X Month they had me registered as non domiciled as of that date. My wife and I both got a significant tax rebate too by doing this. It means that you are only liable for the 20% rate of tax and as I imagine the house will be let from roughly when you leave this makes life easier. My agent let the house 5 days after I left meaning there was no overlap from a taxation point of view.

Hope this helps. I really can't recommend the agent route enough, remember speaking to family across the world in a different time zone is a pain, you don't need to have the same dealing with tenant issues. The agents fees are tax deductible too.

spaceHopper

Can you let it as a corpoate let to a compan via an agent, that way you are somewhat insulated from on over holding tennant and you can say in 9months say you will need it back at the end of the year.

Del2005

MacDanger wrote: »

Renting to someone you know is your best bet, it means you shouldn't have any problem with getting the property back and they'll also be more likely (you'd hope) to take care of the house

Good luck in NZ

If the friend finds out after a year that they can't get anywhere else to live you now have to go through the RTB process to get them evicted. People are nice till they discover what they can get away with and tenants get away with everything.

Samuel T. Cogley

Factor in the cost of significant wear and tear, you might get lucky but you might not.

chocfan

Thanks very much to everybody for your advice

It's certainly given us something to think about.

I would love to be in a position where we didn't have to rent and could just have somebody live in it rent free but unfortunately that wouldn't be possible financially.

I think we'll try and do as James Bond Junior did and get the maintenance etc sorted through an agency but try to rent to somebody we know so as to limit any issues getting the house back after a year, while registering for tax etc. That way it would all still be above board and is our best chance of not having any issues getting the house back

Much appreciated

CF