Foreign/Domestic Landlord

Smouse156

Hi, just looking for some advice. If I rented my house to my non-resident brother and he subsequently Sub-let the property with my consent who would be liable for tax on rent received. E.g I rent house to my brother for €1000/month and he sub-let’s out rooms for a total income of €2500/month, what tax am I liable for? What tax is he liable for?

Pkiernan

Smouse156 wrote: »

Hi, just looking for some advice. If I rented my house to my non-resident brother and he subsequently Sub-let the property with my consent who would be liable for tax on rent received. E.g I rent house to my brother for €1000/month and he sub-let’s out rooms for a total income of €2500/month, what tax am I liable for? What tax is he liable for?

You're liable for tax on the 1k a month income.

Your non resident brother would be subject to 20% tax on the 1500 he is making.

Revenue might look at this arrangement as evasion by the way.

Smouse156

Pkiernan wrote: »

You're liable for tax on the 1k a month income.

Your non resident brother would be subject to 20% tax on the 1500 he is making.

Revenue might look at this arrangement as evasion by the way.

Ok thanks for this! My other question is are student rentals which is usually on a room by room basis, registered with the RTB?

Peregrinus

Pkiernan wrote: »

You're liable for tax on the 1k a month income.

Your non resident brother would be subject to 20% tax on the 1500 he is making.

Revenue might look at this arrangement as evasion by the way.

The 20$ tax applies to the 2,500 that the non-resident brother receives. It's calculated on the gross rent, and [should be] withheld by the tenants and paid directly by them to the Revenue. The tenant has no way of knowing what rent the non-resident brother is paying, or even that he is paying any rent at all, so he should withhold 20% of 2,500.

It's then up to the non-resident brother to make a tax return, claim a credit for the amount withheld by the tenants, and claim a deduction for the amount of rent that he himself pays.

Pkiernan

Peregrinus wrote: »

The 20$ tax applies to the 2,500 that the non-resident brother receives. It's calculated on the gross rent, and [should be] withheld by the tenants and paid directly by them to the Revenue. The tenant has no way of knowing what rent the non-resident brother is paying, or even that he is paying any rent at all, so he should withhold 20% of 2,500.

It's then up to the non-resident brother to make a tax return, claim a credit for the amount withheld by the tenants, and claim a deduction for the amount of rent that he himself pays.

Good point.

Smouse156

Pkiernan wrote: »

Good point.

Thanks guys for that info. Last question related to buying a property with my brother that lives abroad (outside EU). Is it difficult to get a mortgage to purchase a property jointly with a non resident?

Peregrinus

Smouse156 wrote: »

Thanks guys for that info. Last question related to buying a property with my brother that lives abroad (outside EU). Is it difficult to get a mortgage to purchase a property jointly with a non resident?

Yes. But not impossible.

(Should point out that if you and your brother jointly purchase and jointly own the property, the Revenue will take an even more jaundiced view of the claim that you are letting it to him and he is subletting it to the tenants.)