# How much tax on rental income



## guerngirl (29 Apr 2013)

Hi, i understand that rental income is subject to income tax.  How exactly is that calculated.
For example, an apartment that yields 1000 eur a month = 12000 rent per year.
75% of the interest can be offset.
Imagining that leaves 3000 of a balance, how much tax is paid on the 3000?  Is it the lower rate of income tax or how exactly does it all work?
Thanks


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## kkelliher (29 Apr 2013)

To start with 75% of your mortgage interest is not 75% of your rental income.

Your income tax will depend on your overall tax position as it has to be added to whatever other income you have. This will also dictate the rate you pay as it depends in overall income. In general your rental income can be adjusted for 75% of mortgage interest, management fees, insurance, maintenance, etc


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## guerngirl (29 Apr 2013)

Thank you, that's much clearer.


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## Bronte (29 Apr 2013)

In addition to income tax there is also the universal social charge.


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## Reick (29 Apr 2013)

And also PRSI from next year?  (Not sure of the rate) (2%?).


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## mandelbrot (29 Apr 2013)

Reick said:


> And also PRSI from next year? (Not sure of the rate) (2%?).


 
PRSI is currently 4%

Landlords who have to file a self-assessment tax return (Form 11) already suffer PRSI on their rental income.

The change next year is to levy PRSI on landlords who are PAYE-taxpayers (Form 12 filers).


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## elcato (29 Apr 2013)

See this earlier post about what needs to be paid. It's a bit out of date with the tax but gives the gist of what form and what costs are deductable.


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## murphaph (29 Apr 2013)

mandelbrot said:


> PRSI is currently 4%
> 
> Landlords who have to file a self-assessment tax return (Form 11) already suffer PRSI on their rental income.


Except non-resident landlords, who are exempt from PRSI.


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## dark horse (6 Sep 2013)

I gave my accountant my rent and itemised each of my expenditure for him but now he has said that he wants the date of each expenditure....is this really necessary? I've never been asked this before and it's a bit time consuming to be going through my receipts and bank statements for dates.


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## Joe_90 (6 Sep 2013)

Perhaps to confirm that they are in the correct year.


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## dark horse (7 Sep 2013)

But then would she not just ask me to verify that it is all for 2012. I assume there is no reason to have dates for each expenditure?


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## Knuttell (7 Sep 2013)

dark horse said:


> I gave my accountant my rent and itemised each of my expenditure for him but now he has said that he wants the date of each expenditure....is this really necessary? I've never been asked this before and it's a bit time consuming to be going through my receipts and bank statements for dates.



I presume you gave him all the paper receipts when you asked him to do your return?


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## dark horse (7 Sep 2013)

No I just give him the list of expences, he said he doesn't need to see the receipts as long as I verify I have the receipts. So I itemise the expences so he can see what I bought or repaired in case something isn't allowable. Do they need dates....I've changed accountants and I've never been asked for that before.


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## Knuttell (8 Sep 2013)

dark horse said:


> No I just give him the list of expenses, he said he doesn't need to see the receipts as long as I verify I have the receipts.



Seems a bit confusing,surely the simplest thing would be to give him the receipts (they are dated anyway) and get them back after he is finished.Certainly cuts down on all this having to manually itemize items & back and forward nonsense.

I have always supplied all my receipts to the accountant,right down to the receipt for €4 for getting a key cut.

You should start a separate thread though.


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## Keredz (21 Sep 2013)

murphaph said:


> Except non-resident landlords, who are exempt from PRSI.


 
After becoming a non-resident landlord (moved to the UK) could someone please tell me how best to calculate and submit tax returns on the property rented out in Ireland?

If the total rental income for 2012 is less than 75% of interest on mortgage payments + agents fees + insurance etc. would I be correct in saying that there would be no tax payable or is this too simplistic?


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## murphaph (22 Sep 2013)

It's not too simplistic no. If your allowable expenses such as those you mentioned exceed your rental income then there's no profit to tax. You should be able to carry the loss forward though and use it in future years to reduce your tax liability, but I've never had this scenario personally so I can't help much there.


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## murphaph (22 Sep 2013)

As for submitting the returns...do yourself a favour and avoid paper filing like I've been doing. Register for ROS and do it online as mandelbrot advised me to do in another thread. It's pure heartache dealing with them when they keep entering things incorrectly into their system from your paper return.


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## Bronte (23 Sep 2013)

Knuttell said:


> Seems a bit confusing,surely the simplest thing would be to give him the receipts (they are dated anyway) and get them back after he is finished.Certainly cuts down on all this having to manually itemize items & back and forward nonsense.
> 
> .


 
My accountant does not want my receipts, he does this service if one wants, which he considers book keeping but it will cost me more.  Some of his clients literally supply him receipts stuffed into a cornflake box etc. 

Our arrangment is that I put all receipts into an excel, I divide it into the different categories as well (but that's because I try to understand how the tax system works for rent).  

OP should get a binder and each time he pays for something it should be put in the binder in date order, per year.  And he should be checking his bank statement monthly and writing on it the items he has purchased, in case he loses a receipt or cannot remember what he bought.


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## Bronte (23 Sep 2013)

murphaph said:


> You should be able to carry the loss forward though and use it in future years to reduce your tax liability,QUOTE]
> 
> Yes you can carry the loss forward.
> 
> Keredez, I advise you to hire an accountant, at least for the first year so that you get things right from the beginning.  It won't cost you a lot, and it might save you money, plus it's also tax deductable.


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## Max Johnson (31 Mar 2014)

Thank you all for contributing to this thread.

I am a non-resident landlord and I am late filing for property tax. I was worried about the tax implications. 
I am taking from this that as long as my rental income is below my mortgage payment, I do not have a tax liability.

Man, doing the right thing is a lot less stressful when there isn't a massive price tag.

Again, thanks you guys.


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## cremeegg (31 Mar 2014)

Max Johnson said:


> T
> I am a non-resident landlord and I am late filing for property tax. I was worried about the tax implications.
> I am taking from this that as long as my rental income is below my mortgage payment, I do not have a tax liability.



No. No. No.

This thread is about INCOME TAX on rental income. If you make a loss you don't have to pay INCOME TAX.

PROPERTY TAX is a different matter. You DO have to pay that irrespective of any profit or loss.

And the penalty for late payment is severe. In fact TODAY is the last day to declare for 2014

Sorry to bring bad news.


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## Max Johnson (31 Mar 2014)

cremeegg said:


> No. No. No.
> 
> This thread is about INCOME TAX on rental income. If you make a loss you don't have to pay INCOME TAX.
> 
> ...



Thank you for taking the time to respond.

I was inartful in my post. I know I have to register for the property tax, my concern was that this would red flag me with Revenue as a landlord and I would then have a tax bill on rental income.
I left Ireland in a hurry to take a job and have not been as attendant to these matters as I should have.

I do understand the difference, I just didn't make that clear.

Again, thank you.


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## DB74 (31 Mar 2014)

Max Johnson said:


> I am taking from this that as long as my rental income is below my mortgage payment, I do not have a tax liability.



If your rental income does not cover your rental expenses (which can include *75%* of your MORTGAGE INTEREST, *NOT* mortgage payment) then it is unlikely that will have any liability to income tax


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## Max Johnson (1 Apr 2014)

DB74 said:


> If your rental income does not cover your rental expenses (which can include *75%* of your MORTGAGE INTEREST, *NOT* mortgage payment) then it is unlikely that will have any liability to income tax



Thank you.


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