Key Post: Wear and tear allowance in rented property

E

Elcato

Guest
I understand that, in calculating your liability to tax, you are allowed to offset 20% of the value of fixtures and fittings each year over 5 years against the gross rent received.

What if the fixtures & fittings were bought some time ago? Is it still possible to claim this depreciation allowance?

For example, say you bought a new house 7 years ago and fitted it out and you were now thinking of renting it. Are the fixtures & fittings considered to be already fully depreciated or can you still claim? If you can claim, what value are you allowed to put on them for this purpose?
 
Re: Wear and tear allowance

The property does <!--EZCODE BOLD START--> not<!--EZCODE BOLD END--> have to be newly kitted out to claim wear and tear.

Just make an inventory of the fixtures and fittings and guesstimate their values as at the date of the first letting. There's no need to root out original invoices - your best estimnate will do.

A valuation of €7,000 to €12,000 for the contents of the average rental property should be acceptable to the taxman.
 
Re: Wear and tear allowance

Once the estimates used are fair and reasonable, there should be no problem.

It would be important to keep safe a copy of the inventory for future reference if needed.

Tommy
www.mcgibney.com
 
Re wear and tear allowance

Re the 20% depreciation allowance on fixtures and fittings:

My parents have just bought a house that has been an investment property for 10 years. The previous landlord included most furniture with the sale. Can my parents claim this allowance in respect of any items that were already in the house (e.g. cooker, fridge, 3 piece suite etc.) given that the previous landlord may have already claimed depreciation on these items?

I already included this post in the Tax section but it should probably go here - sorry for the duplication.
 
Re: Re wear and tear allowance

Hi Kathy,

given that there is absolutely no way you can find out (definitively) what (if any) allowances the previous landlord claimed on the furniture & fittings, it should be quite reasonable for you to value same at current estimated value when the house was bought.

Tommy
www.mcgibney.com
 
20% depreciation on existing fixtures and fittings

Hi

There was a comment in this topic that for existing fixtures and fittings for a residential property now being rented out, that a figure of 7 to 12 thousand euro would be acceptable by the revenue for depreciation over five years.

I note that this guesstimate should be backed up by an inventory and extimates.

I have two questions:

1. Are the estimates to be the current market value (ie an old suite is now worth 750 euro not 1750 euro when bought several years ago) or the replacement cost (ie current market value)

2. Does anyone actually have experience of dealing with the Revenue on this matter and were there any problems

thanks
Derryman
 
Re: 20% depreciation on existing fixtures and fittings

Hi Derryman,

I would expect that current market value would be a more logical value to use rather than replacement cost, which ultimately would be fairly arbitrary.

I haven't, as of yet anyway, ever had to argue this type of thing to the wire with the Revenue. As far as I can see the only scenario where this is likely to happen is where a landlord is the subject of a Revenue Audit. In that sort of situation, the Revenue approach to any individual case (i.e. whether Joe Landlord's furniture was worth €5,000 or €6,000 on May 30 2002) is likely to be dictated by the opinion of the particular Revenue official undertaking the audit than any set-in-stone principle or precedent.

Once the amounts claimed are reasonable and once nobody is trying to pull a fast one, I don't think the Revenue are going to be unduly concerned about the exact valuations used, particularly if the taxpayer has kept a comprehensive inventory of the contents of the house, and all other aspects of their tax affairs are fully in order.

Tommy
www.mcgibney.com
 
changed allowances

If I'm not mistaken, the wear and tear allowance is now 12.5% over 8 years since the last budget. Can anyone confirm this?
 
Can anyone tell me what can be included as a Wear and Tear allowance when calculating Income profit in relation to Fixtures and Fittings. I have included a sample list below so perhaps we could start a discussion on what can and can’t be included from the list below and possibly suggest some other things that can be included. Thanks in advance.

Fixtures
Bathrooms
Boilers (Oil)
Kitchens
Built-in Wardrobes/Presses
Burglar alarms
Central heating systems
Double glazing
Electrical Wiring
Fencing
Fireplaces
Floor Covering stuck down over its entire surface, e.g. tiles
Gates
Immersion heaters
Tiles/Paint
Storage heaters/radiators
Storage tanks for oil or water for heating etc. systems

Fittings
Blinds
Curtains
Fitted carpets and lino
Kitchen white goods, e.g. cookers, washing machines, fridges. etc.
Lighting
 
I see that this thread is quite old...is this allowance still available to claim at the rates indicated above?
 
ronaldo said:
Can anyone tell me what can be included as a Wear and Tear allowance when calculating Income profit in relation to Fixtures and Fittings. I have included a sample list below so perhaps we could start a discussion on what can and can’t be included from the list below and possibly suggest some other things that can be included. Thanks in advance.

Fixtures
Bathrooms
Boilers (Oil)
Kitchens
Built-in Wardrobes/Presses
Burglar alarms
Central heating systems
Double glazing
Electrical Wiring
Fencing
Fireplaces
Floor Covering stuck down over its entire surface, e.g. tiles
Gates
Immersion heaters
Tiles/Paint
Storage heaters/radiators
Storage tanks for oil or water for heating etc. systems

Fittings
Blinds
Curtains
Fitted carpets and lino
Kitchen white goods, e.g. cookers, washing machines, fridges. etc.
Lighting
Click to expand...

I can't find any clear guidance from revenue website on what would be considered fixtures & fittings for wear and tear purposes and guideline amounts. Can anyone advise? Is the above list reasonable and should it also include all furniture?

Thanks!
 
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