advice needed re tax implications of renting out apt

[MovingOn]

Hi Everyone,

I need some info please...

Our apartment has been on the market over a month with zero interest am not really surprised as the area we live in is currently flooded with properties and they are selling for a lot cheaper than we currently want to go... So the option is to rent out the apartment and buy another house. We have mortgage approval to do this. We can release equity in the apartment raise the mortgage and pay interest only and still get mortgage approval on a new house.

Now for my question and I apologise if it seems very simple. If our mortgage on the apartment is €1150 per month and we get rent of €1150 per month, are we liable to pay any tax?

Thanks

 

[Brendan Burgess]

You will be taxed on the rental profit.

The rental profit is the

Rental income
Less mortgage interest ( not repayments)
Less allowable expenses.

This is discussed in detail elsewhere in the forum

Brendan

 

[webtax]

You should also note that the mortgage interest on the equity release cannot be used as an expense to reduce your rental income for tax purposes.

 

[Shark Trager]

I think if you are parking your property in the rental market to sit out the downturn you will be waiting a longtime,property will soon stop falling in Dublin anyway,but prices will not recover for a long time.Weigh up the pros and cons of the LL business,take it from me,its not just a question of finding a tenant and forgetting about it,ensure you do so eyes open,

 

[badabing]

You want to sell the apartment for more than its worth, and are thinking of renting it till the market recovers. You should consider the scenario that you will get more for it now than you will in 12 months time. Interest rates on offer by most banks have increased lately and unemployment figures are up. Couple that with the fact that the banks will be calling in their loans to developers soon, and we could have carnage...the **** may have yet to hit the fan

I would do it up so its looks better than the competition, sell it for 5k less, and have rid of it. Presumably this should not be a problem for you, as you are buying another house that has fallen a similar amount from the peak, no?..If, not, you should be prepared to bargain hard with them, they afre in the same situation as you.