# Paying Tax on my property that I will be renting out.



## Gary_b (14 Apr 2009)

Hi All

I have a question that has be confusing me for the past week or so. Could some please answer this if possible.

How do I pay tax on a property (Owner) that I will be renting out?

Here is some details about my situation.

I have a apartment that was brought to live in but due to a family matter I have needed to move how for a while (1 year I would say). 
I have registered as a landlord and everything is above board. I own/living in the apartment more than 2 years aswell.
Im will be renting the apartment for roughly 950 or so , its just to pay the mortgage as Im not in it to make any kind of profit.
I have been told that I will need to pay tax on the property, I taught that this would only be on anything that was profit , ie if i was making some money off renting. 

I was told that i would need to pay tax on the mortgage interest I pay each month?
Could so tell me if this is true?
Also if it is true how do I go about paying this?

Thanks
Gary


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## Graham_07 (14 Apr 2009)

You are probably receiving Tax Relief at Source (TRS) on the mortgage. You will not be entitled to TRS once the property is rented. 

You will be able to offset the interest to the value of 75% of interest paid (dropped from 100% of the interest paid as result of budget changes last week) against the rental income. You will also be entitled to deduct other costs in letting such as the PRTB registration fee, any service charges or maintenance, insurance etc. from the rental income. If rent less interest less allowable costs results in a net income amount then that is taxed at your marginal rate. You can file it on Form 12 if the amount is not large.


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## markiem (14 Apr 2009)

Hi All,

I have a rental property and so far I have been allowing the following against income. 
1) Mortgage Interest
2) Property Management
3) Maintainence.

I know that the Mortgage interest is now 75% of total. Is there anything else that I can allow? Maintainence is for any repairs that I had to get do. (Plumber etc)

Can I allow anything for general wear and tear on the contents?


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## Gary_b (14 Apr 2009)

Hi all
Thanks for the replies. I will be cancelling my mortgage relief this week. im abit confused with (sorry im not up to date with tax system as I didnt really want to rent but now have to)
If I was to recieved rent of 950euro, how much (roughly) would I need to pay in tax each month/year?
Also, when you say deduct costs like Management and Maintainence costs how do I actually do that ? Is that something I would claim back at the end of the year with filling in a form?

Sorry these questions might sound stupid but It something I need to get my head around before I rent the property

Thanks


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## L0llip0p (17 Apr 2009)

does levy also get applied to income received from rental?

eg received 10k rental income 
offset prtb, maintenance, insurance, 75% mortgage interest
= zero tax owed.

will u still owe a levy ?


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## Graham_07 (17 Apr 2009)

markiem said:


> Hi All,
> 
> I have a rental property and so far I have been allowing the following against income.
> 1) Mortgage Interest
> ...


 

The cost of fixtures/fittings and equipment can be written off at 12.5% over 8 years. You can also claim on any costs directly associated with the letting, PRTB, legal to create a lease , etc.


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## Graham_07 (17 Apr 2009)

L0llip0p said:


> does levy also get applied to income received from rental?
> 
> eg received 10k rental income
> offset prtb, maintenance, insurance, 75% mortgage interest
> ...


 
The levy would be on the net income after allowable costs but before any wear and tear on fixtures etc.


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## Graham_07 (17 Apr 2009)

Gary_b said:


> Hi all
> Thanks for the replies. I will be cancelling my mortgage relief this week. im abit confused with (sorry im not up to date with tax system as I didnt really want to rent but now have to)
> If I was to recieved rent of 950euro, how much (roughly) would I need to pay in tax each month/year?
> Also, when you say deduct costs like Management and Maintainence costs how do I actually do that ? Is that something I would claim back at the end of the year with filling in a form?
> ...


 
Take Rental income €950 x 12
Less mortgage interest € ? x 75% 
Less costs e.g. PRTB, insurance, maintenance etc.
Less Wear & Tear on any Fixtures/Fittings at 12.5% of cost/value
= Taxable income. ( NB Levy is before W & Tear ) 
If taxable income is positive then that is added to your other income and taxed at your highest rate. If its a minus, then your in a loss so no tax due. Losses can be carried forward to future years.

You can file rental income on standard tax return Form 12 or if amount is large mayneed to complete self-assessed Form 11.


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## WaterSprite (17 Apr 2009)

Gary_b said:


> Hi all
> 
> If I was to recieved rent of 950euro, how much (roughly) would I need to pay in tax each month/year?



In order to calculate your tax, you also need to include your mortgage interest payment.  For example, if you get 950pm in rent and your mortgage is 1000 a month, made up of 600 interest and 400 capital payments, then you can deduct 75% of the interest against the rent (so take 450 away from the 950) and you pay tax at your marginal rate on the remaining 500.  This doesn't take into account expenses - I'm not an expert on what can be deducted - but you get the general gist.

I don't know if the income levy is applied pre- or post- expense-deduction.


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## venice (17 Apr 2009)

This should help

[broken link removed]


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