# Net Rental income less than mortgage - need i pay tax on the income?



## Bob Nellies (22 Jun 2010)

Hi, 

i'm completely new to this. I am renting out my Principal Private Residence and moving into rented accommodation myself. 

Having worked out the rental income less expenses, i am over 3,000e short on the mortgage repayments. 

Is this 3,000e a loss carried forward for tax purposes, where by i can deduct it from: 

net rental income:                                                                   5000
less amt spent on capital items
  (100e@12.5%)                                                                    (12.5)
less loss carried forward for year 
 (mortgage shortfall)                                                               (3000)
= taxable rental income                                                     =   1,987.5
less tax @ 46%:                                                                  (914.25)profit after tax:                                                                 = 1073.25

Advice would be appreciated. 
thank you.


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## hippy1975 (22 Jun 2010)

afraid not, it's only the interest portion of your mtg payment that is relevant so if your rent received is greater than that you will be liable for tax


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## xeresod (23 Jun 2010)

Only 75% of the interest is allowable and that's only if you comply with the PRTB registration requirements.


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## mathepac (23 Jun 2010)

*net rental income:                                                                   5000* - how is this figure arrived at and what's its relevance?
*less loss carried forward for year  (mortgage shortfall)                                                               (3000)* - again how is this figure arrived at and what's its relevance?

As per xeresod above on mortgage interest.

I think you may need to look at your sums and assumptions again.


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## dr_octagon (7 Jul 2010)

Does it matter what the figures are? The jist of the question is, I guess, what happens if (RentalIncome - MortgageRepayments) < (TaxLiability - AllowableDeductions)?

For the sake of argument let's say that a hypothetical landlord has just 1500 euros left in his/her rent account at the end of the tax year but their tax obligation is 3000 euro; is he or she expected to pay the 1500 euro shortfall using money from another income - an income which has in all likelihood already been subject to income tax?


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## saintstephen (7 Jul 2010)

have you considered the income levy tax on all rent received.


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## dereko1969 (7 Jul 2010)

Don't forget to pay the NPPR which is not deductible as an expense


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