Landlords selling up - Rents rising

The J Stands for Jay

https://www.boards.ie/discussion/comment/117792054#Comment_117792054

Mortgage repayment is not an expense (other than the interest portion).

The J Stands for Jay

https://www.boards.ie/discussion/comment/117792136#Comment_117792136

In any normal business, you're taxed on the €1,500 (less loan interest only).

JimmyVik

https://www.boards.ie/discussion/comment/117792025#Comment_117792025

No way :)

You are the one. It was a running joke in there that if they ever caught hold of the person who designed the systems they would would put them iun a stockade in front of the GPO. I hope you didnt design ROS as well. Thats just shocking to use too.

JimmyVik

https://www.boards.ie/discussion/comment/117792964#Comment_117792964

Me too.

Also paid my wife a salary.

And then paid myself a bonus to use up any money left in the company account every year.

Donald Trump

https://www.boards.ie/discussion/comment/117795836#Comment_117795836

If you are a sole trader it's still called drawings regardless of how you take it out. You might have had a limited company structure.

JimmyVik

https://www.boards.ie/discussion/comment/117796280#Comment_117796280

Yes I was self employed.

It was a limited company.

Most self employed are via limited companies.

Donald Trump

https://www.boards.ie/discussion/comment/117796296#Comment_117796296

Not directly relevant to the topic at hand but sole trader is very common. I would have guessed it was more common for self employed people. A limited company is actually beneficial for buying property compared to a sole trader, but not for the reasons espoused above. It is due to the 12.5% corporate tax rate. But if you do that then the company, and not you, owns the property. You would get taxed if that asset value leaves the company to get to your pocket at a later stage.

I don't know whether there are specific rules on the above for residential property. I would think probably not

JimmyVik

https://www.boards.ie/discussion/comment/117796363#Comment_117796363

I never heard of a self employed person buying a house through their company. That would be madness.

But you are right. Its off topic. I think, though ive forgotten at this point that the reason this line started was that someone was trying to make out that small business owners don't get tax relief for the hours they put into their business.

Then someone pointed out that they pay themselves and then it went off on a tangent about all sorts of different words for paying yourself.

Best forgotten at this point :)

Bass Reeves

https://www.boards.ie/discussion/comment/117797371#Comment_117797371

While it might seem strange it might have its advantages. While paying off the property you would have access to the 12.5% company tax rate. Ideally you should set it up as a separate company. Any money put in ( such as a house deposit) can be taken out down the line subject only to 12.5% tax. If you set it up as a mini REIT you might have access to other tax advantages. If you were buying it as part of a pension plan you could take part of the earning directly as wages. Main disadvantage is if you wanted or decided to sell the house in that case any drawing would be at your marginal tax tax rate, any profit over buying price would be libel for company tax rate as well as tax at drawings. However if you were retired this might not be too onerous as you might have unused tax credits. You could access this money over a number of years. However you would have to have company accounts done every year. You also would have the option of selling the house as a company and paying capital tax on it. However you would have no access to original house value. It would also be hard to borrow to buy the house

Bass Reeves

https://www.boards.ie/discussion/comment/117773438#Comment_117773438

Before the RTB would start chasing the LL they would require proof of rent. Now they would have rental on record from the RTB registeration. However you would have the issue as well if the rent was static for a number of years the LL is allowed to rise rent for these years as well. Previous to last July it was 4%/Year. For instance a tenant that was in a house 5 years and LL left the rent as is for the 5 years can hike rent by 20% when he rents to a new tenant

https://www.boards.ie/discussion/comment/117776752#Comment_117776752

If it was proven that you knew for a long time and had not initiated proceeding your case would be viewed differently. Your compensation would be limited to maybe 3-6 months very charging. You are under an obligation to start proceeding as soon as you have knowledge the rent difference. While the RTB might find for you still would have to recover the overcharged rent. If it was a large sum the LL might challenge the finding in court. Not sure if its he RTB or you would have to deal with that deal with that . We already see how hard tenants find it to recover deposits from some LL's.

https://www.boards.ie/discussion/comment/117767808#Comment_117767808

Huge issue as getting repossession of a house is so complex and time consuming now some are choosing not to rent property. It was noticeable with the recent change regarding property of nursing home residents that there is no flood of new property

onto the market

https://www.boards.ie/discussion/comment/117737374#Comment_117737374

The problem now is that it is coming to the stage where a group of larger private LL's might well finance a challenge against some of the rental legislation. They might as well challenge the inefficiencies of the RTB on regaining possession of there property. A group of 30-50 larger landlords contributing 5-10K each 2 million plus war chest

mrslancaster

https://www.boards.ie/discussion/comment/117798932#Comment_117798932

If the estimated half million landlords each paid something to a legal firm that would be a good chunk of change but it'll probably never happen. IIRC, there was something on boards some time ago about that kind of legal challenge not being allowed, don't remember exactly - is it a class action or something?

Edit: Maybe there should be a threshold type organisation for landlords. Does the state have an obligation to fund charities providing information to both parties equally or can they give preferential treatment to tenants by funding several tenant charities plus all the AHB's? Just wondering..

Donald Trump

https://www.boards.ie/discussion/comment/117798832#Comment_117798832

Actually Bass, I think that any money put in, or any property or other assets transferred into the company structure, at least when converting to a company, are accounted for as director loans and can be taken back out without being taxed. They wouldn't be subject to the 12.5% tax.

They wouldn't know about that here on the property forum. We'd need to go over to the F&F forum for clarification 😉

Bass Reeves

https://www.boards.ie/discussion/comment/117799449#Comment_117799449

You are right I think. There would be little advantage in putting a complete property in unless you wanted to leverage it to borrow to buy another 1-2 properties

JimmyVik

Looks like another landlord sorry that he rented and cant get the tenants out.

I think a lot of this is coming and its just going to get harder and harder for landlords to get their investment back so they can sell it or even just get not so nice tenants out of it.

https://www.property.ie/property-for-sale/C2-Tarmon-Harbour-Termonbarry-Tarmonbarry-Co-Roscommon/6129110/

The only reason I saw this was looking at buying a holiday home there a couple of years ago.

Had rented one a few years ago and thought it was lovely.

When I went to view the one i was interested in buying, things had changed in the couple of years gone by. A few doors down looked like a halting site, so I backed out.

It was supposed to be a holiday home and didnt feel like that with that monstrosity in the middle of it, so i backed out.