Am I unduly negative about our position? Should we sell rental property?

[noobie]

Can I just deal with this issue, as it comes up from time to time.

The only reason you are paying tax, is because you are making a profit!

Getting rid of a rental to save tax, is like saying "I don't want a salary increase as I have to give away half of it in tax."

Brendan

Good point - just shows how much I'm not seeing the wood for the trees!

 

[noobie]

I wouldn't agree with that Brendan - the OP will be 59 before the investment mortgage is cleared as things stand.

The rental is certainly profitable but if it is impacting the OP's cashflow position to the extent that it reduces the ability to make tax relieved pension contributions, then I would sell the rental.

Thanks, the only thing about that is putting all eggs in one basket with the AVCs, I know the tax element brilliant, I'm going to see if we can put mine back to 25% and there's about 7k for 2021 I didn't put in, that given @NoRegretsCoyote 's comment re: the prize bonds, maybe we should be taking money from there to do that. That then gives some breathing space in the day to day as well.

 

[noobie]

I agree. First line of financial defence is the prize bonds anyway. It would be foolish to hold on to these while failing to take advantage of tax-relieved pension contributions in your 40s.

Thank you for this - I actually didn't think of that, I have myself wired not to dip into it that I forgot sometimes it makes sense!

 

[noobie]

Firstly, take a look at your tax position and get some professional advice as to whether or not you have everything set up in terms of credits and what you can claim for and whether or not you can do a claim for past years

Sell the rental, that's harsh on the current tennants but such is life and you need to prioritise yourself and your family. You earning 800 a month in rent on an asset that is costing you 1330 in mortgage payments and tax. Including the prize bonds, you'll have around €150k to invest, either by reducing your current mortgage or doing something else with it. 25k in what in essence are raffle tickets makes no sense

You then won't need to save 500 per month to cover the rental tax and you will see a difference once that happens.

...raffle tickets, love it! I take your point, at the time I figured there was nowhere offering much return and wanted no risk - and to keep them slightly out of my own reach as well...