41% on rental income?

H

holaquetal

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I am an employee and part of my salary is taxed at 41% (whatever is above my threshold). Let's now say that I rent a property: is the taxable rent income taxed at 41% because it adds up to my salary income? I am jointly assessed with my wife, how does the taxable rent income split between my wife and myself?

I know I should ideally get a tax adviser to help me with these questions but I want to start modelling myself whether it makes financial sense to rent the property or not based on how much taxes I will have to pay at the end of the year.

Thanks
 
Rental profit is subject to Income Tax PRSI and USC.

So it's rental income less 75% of interest (if residential), insurance, management fees, insurance, repairs = rental profit.

If the property is owned 50:50 the the rental profit is divided equally between yourself and your wife.

Capital allowances are available at 12.5% on capital items.
 
Thanks for your reply! So this mean that the taxable rent is subject to 52% tax, is that correct?

Yes, I read quite a lot recently and I was glad to learn that interest and a number of expenses are deductible.

Can you clarify what do you mean by "capital allowances are available at 12.5% on capital items"? I didn't understand that part of your reply.

Thanks!
 
Capital allowances example:

new furniture or flooring or kitchen appliances deduct 12.5% of capital cost each year as a pre-tax expense for 8 years.
 
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