Rent Relief and Mortgage Interest Relief

A

An Dagda

Guest
Hi, forgive a newbie here, but I cant find exactly the answer to this dilemma I have.
I own a property and have been renting it out for the last few years. I do not live in this property I in fact rent a property in another city.
For the past few years I have been getting Mortgage Interest Relief on the property I own.

My first question is can I claim rent relief for the apartment I currently live in while also claim mortgage interest relief on the house I own ?

My second question is this...My landlord recently requested my PPS number as he wants to claim rent relief himself. I'm wondering if giving him my PPS number will cause problems for me, as I'm not sure if me claiming Mortgage Interest Relief while not living in it is actually legal? I dunno for sure, the terminology used in any documentation I've seen is not clear.

Any help or advice here would be much appreciated thanks :)
 
Your landlord is looking for your PPS number so he can register the tenency for his property with the (Private residential tenency board) PRTB. This will also allow him to claim the interest (75%) on his mortgage against his rental income. You should have also done this for the property you own. If you haven't you can't claim mortgage interest relief for your own property. You should also be making a return to the revenue for your rental property that you own each year.
 
Thanks for your reply Galwayboy. I was not aware of this tbh. So only if I sign up for the PRTB can I then be allowed to claim mortgage interest relief on an house I no longer live in? Ok I will act on this, but what do u think might happen with the fact that I have not lived in it for about 3 years and have been claiming Mortgage Interest Relief since then? Will revenue be trying to get this back ? And will they find out about all this when my landlord supplies them with my PPS number ?
 
Once you rent out a property that was formally your PPR, the following is usually the case:


1. you can no longer claim TRS - tax relief at source on the mortgage interest

2. you get a different type of tax relief on the mortgage interest, whereby you can deduct 100% or 75% of the interest from the rental income when doing your tax return

3. inform your house insurer

4. inform the mortgage lender (???)

5. register the tenancy with the PRTB

6. do a tax return each year to return your rental profit / loss, this is where you deduct the interest and other costs

7. recently, a 200 pa property tax on non-PPRs was introduced

8. you can claim a rent tax credit on the rent that you pay
 
Thanks Protocol, you have been very helpful. All the best.
 
Protocol said:
Once you rent out a property that was formally your PPR, the following is usually the case:


1. you can no longer claim TRS - tax relief at source on the mortgage interest

2. you get a different type of tax relief on the mortgage interest, whereby you can deduct 100% or 75% of the interest from the rental income when doing your tax return

3. inform your house insurer

4. inform the mortgage lender (???)

5. register the tenancy with the PRTB

6. do a tax return each year to return your rental profit / loss, this is where you deduct the interest and other costs

7. recently, a 200 pa property tax on non-PPRs was introduced

8. you can claim a rent tax credit on the rent that you pay
Click to expand...


Hi there - a question on point 2 - if your interest on your mortgage is greater than your rental income such that deducting 75% yields a negative figure - what happens? i.e. - mortgage interest = 12000 euro and rental income = 10000 euro say - do you gain a payment (similar to TRS) or is it just a case that your tax bill on the rental income is zero or close to it?
 
Thanks for the prompt response.
So you never get a payment per se but rather if you're in that situation where your rental income is less than your mortgage interest you'll perpetually carry forward the loss and use it against the next year's tax return - correct? Does this mean that if you're interest v rent is negative then you effectively will pay little or no tax on the rental income?
 
None. The figure that is liable to taxes, usc, levies etc, is the rental net profit. If this is nil (or a loss), then there will be no liability in that year.
 
thanks for the help...piecing together the costs and in's/out's of renting out my current PPR and renting a different property. If there's a good set of directions for this anywhere please let me know.
Thanks again.
 
Galwayboy said:
Your landlord is looking for your PPS number so he can register the tenency for his property with the (Private residential tenency board) PRTB.
Click to expand...

It is a legal requirement for your landlord to register with the PRTB and as part of the registration they have to give the PPS numbers of all the adult accupants. Your landlord has to do this and you should also do it for your own property.

If you do not give the PPS number, it will likely trigger an investigation into your circumstances as the only people who refuse to give it are potential revenue/welfare fraudsters.
 
An Dagda said:
Ok I will act on this, but what do u think might happen with the fact that I have not lived in it for about 3 years and have been claiming Mortgage Interest Relief since then? Will revenue be trying to get this back ? And will they find out about all this when my landlord supplies them with my PPS number ?
Click to expand...

You are not going to like this..

You should have informed revenue that you were no longer entitled to receive mortgage interest relief from the first day the property was rented,if Revenue find out about this you will be forced to repay all the money you should not have received along with penalties and interest.

If you voluntarily disclose this "omission" to them its likely they will not apply penalty,however its only a matter of time I would think before your name gets flagged for an audit.

I am surprised that you haven't already heard from them which suggests that you have not registered your own tenant with the PRTB? or that you haven't made a tax return for the 3 years since the tenancy commenced...which is another kettle of piranha

There is also the issue of possible claw back of stamp duty if the property was not used as a PPR for a prescribed duration before being rented out.

If you haven't paid the NPPR charge on it either then there is big penalties also awaiting you when you finally have to pony up a settlement there also.
 
Knuttell said:
There is also the issue of possible claw back of stamp duty if the property was not used as a PPR for a prescribed duration before being rented out.


Any idea what the prescribed duration is or where you can find info on this?
Click to expand...
 
Background:

In a similar situation. I didn't buy a house to rent it; I bought it as a home but due to personal issues I have had to move from it. Ideally I would have sold the house and bought another .

Given the drop in prices though I can't afford to sell the house and so now live in rented accomodation.

The rent I make from the house covers about 70% of the mortgage - obviously all other expenses - repairs - charges - etc are on top of this.

When I moved from my house I did register my tenancy and told EBS to stop my TRS.I have yet to claim for rent (only having read the post above did I know I was entitled to this - so thank you!)

Questions
1: What is the most tax efficient way to deal with the situation I am in? - Should my approach be to see the losses I am making each year as a buffer that I can use in the future - when my repayments drop and hopefully my rental income stays the same or maybe even increases slightly?

2: Can I claim Rent relief retrospectively

3: I really would love to sell the house but have about 100K negative equity, has anyone else bought themselves out of a situation like this - if so what type loan would you recommend?


Many thanks-
 
grotty said:
1: What is the most tax efficient way to deal with the situation I am in? - Should my approach be to see the losses I am making each year as a buffer that I can use in the future - when my repayments drop and hopefully my rental income stays the same or maybe even increases slightly?

-
Click to expand...

You are currently running at a loss, you carry this forward. At least you can afford to subsidise the rental.

You can claim rental tax relief for yourself going back 4 years, but I think this has been phased out last budget?

Negative equity - if your bank agrees to you selling and agrees to convert the negative equity of 100K into a long term loan (preferable at current mortgage rates) that is a solution. Otherwide if you want rid of the property you should overpay the mortgage so that you can eventually sell.
 
Hi,
Just a quick question. My Mortgage repayments for the year comes to circa €9,000 (including capital and interest) and i get rent for the year of €7,800. Excluding other costs does this mean i am making a loss for tax purposes and can bring this forward or am i still making a profit as you do not include the capital element of the mortgage for tax purpose (the interest amount would be circa €4,000?
Thanks
 
You don't include the capital, and only 75% of the interest. You must be PRTB registered to deduct that.
So not including any other expenses, you have a profit of around 4,800.
 
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