# Revenue treatment of holiday home rental income



## wjm (4 Nov 2009)

Does anyone know how the revenue treat holiday home rentals for income tax? If a holiday home is setup for rent 52 weeks of the year, but is only rented during the summer months as nobody wants it in the winter, is all interest on the mortgage and running costs allowable against the income?
Thanks...


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## Breninio (4 Nov 2009)

Provided the property is available for rent throughout the period, is subsequently let and nobody (including you + family) have occupied the property rent free in the intervening periods then a full deduction should be available.


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## wjm (4 Nov 2009)

That was quick! Thanks a million Breninio.
WJM...


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## strettie (4 Nov 2009)

Don't forget the revenue allow you a wear and tear allowance of 12.5% of the value of the furniture in the house. Helps to reduce that tax bill !!!!


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## Jugovic (4 Nov 2009)

I have an additional question to the original one:

I have a holiday house that I rented for the summer of 07 and 08 to various people, and also a month or so during those years. I did stay some weekends during those 2 years, so I don't know how that works out re tax free allowance. I have no problem showing all income I availed of for those years. Also, all interest on property (plus wear and tear expenses) far exceeded rental income.

Was I supposed to register with the PRTB with each rental? I rang the PRTB and they said because house is not occupied by the same renters that you cannot 'register' tenants that have come and gone - therefore, I believe, the revenue will not give interest relief for 07 and 08? Whats my best route forward here?

Since August 08, I have rented full time and registered accordingly with the PRTB (been through 2 different tenancies until now).


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## reynolds (4 Nov 2009)

sorry just to jump in, depending on the country you have the property you may also have to pay deemed rental tax etc i.e spain


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## Breninio (4 Nov 2009)

In response to Jugovic's query re PRTB, holiday lettings are exempt from the PRTB registration requirement. Therefore, assuming the lettings of the property in 07 and 08 were holiday lettings then the non-registration should not prevent you from claiming a deduction for mortgage interest. You will have to apportion the mortgage interest deduction to exclude amounts relating to periods in between lettings where you occupied the property,


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## Jugovic (4 Nov 2009)

Hi Breninio,

Thanks for info - whats the maximum length that one could assume for holiday letting? For example, one girl stayed in the house for 6 months at one stage during autumn 07 to spring 08 period. I believe she was working in the local town - if she was getting an income would that be a problem? Because it was during the winter period the rental was quite low (circa 300 a month). If it helps i did stay over a few of the weekends when she was also there.

During the summer period the rentals was about 800-900 a month in total.

Do I need to know the details of all the people who rented during the periods - or just show the rental return when it happened? I put some adds in the paper but mainly had adds up in local shops in the town, and also got some rental through word of mouth. 

I'm doing my returns on this property and I have been told that there will be no issue with late return as the costs far outweigh the income - but its obviously best to show all the income come in. I can also offset the interest versus another investment property that I have. Whats your opinion on this?

Appreciate the help!


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## venice (4 Nov 2009)

How does the revenue know if you are registered with the PRTB or not. There is nowhere on Form 12 to state this? Thanks in advance


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## Graham_07 (5 Nov 2009)

venice said:


> How does the revenue know if you are registered with the PRTB or not. There is nowhere on Form 12 to state this? Thanks in advance


 
Section 13 of the F12 does indeed ask this :-

Where the registration requirements of Part 7 of the Residential
Tenancies Act 2004 have been complied with in respect of all
residential premises tick ​​​​​​​​​the box​


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## venice (5 Nov 2009)

Oh yeah, see it now, Thanks.


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## Jugovic (6 Nov 2009)

Hi Breninio,

Did you read my post on Wednesday?? Any info you have would be very helpful..

Thanks for info - whats the maximum length that one could assume for holiday letting? For example, one girl stayed in the house for 6 months at one stage during autumn 07 to spring 08 period. I believe she was working in the local town - if she was getting an income would that be a problem? Because it was during the winter period the rental was quite low (circa 300 a month). If it helps i did stay over a few of the weekends when she was also there.

During the summer period the rentals was about 800-900 a month in total.

Do I need to know the details of all the people who rented during the periods - or just show the rental return when it happened? I put some adds in the paper but mainly had adds up in local shops in the town, and also got some rental through word of mouth (friends of friends etc.) 

I'm doing my returns on this property and I have been told that there will be no issue with late return as the costs far outweigh the income - but its obviously best to show all the income come in. I can also offset the interest versus another investment property that I have. Whats your opinion on this?

Appreciate the help!


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## Breninio (8 Nov 2009)

I'm open to correction on this but I don't think there is a defeinition for holiday letting. In the absence of a definition, the facts re each letting would need to be looked at. For example, it would be difficult to argue that someone living in the property for 6 months and working in the local town was a holiday letting. The terms of the lease documentation would also be important in determining whether the property was let as a "normal"`rental property or as a holiday letting. This is something you need to get clarified because if the tenancies should have been registestered with the PRTB and have not been, an interest deduction will not be allowed. When preparing your tax computation/return for each period you will show total rental income/expenses for the year i.e. it is not necessary to split between tenants.


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