Expenses allowed and not allowed on a rental property

[CharlieMac]

I am a landlord letting out a property. I pay a letting agent to look after getting tenants in and dealing with all issues. I also pay an accountant to do my tax returns. I am checking if the Form 11 Tax Return makes sense with all my costs and checking on Revenue.ie to see what expenses are allowed and which are not allowed.

I'm confused about what are and are not considered pre and post letting expenses. I'm pretty sure that annual management company fees are tax deductible but what about letting agent fees? They take that from the gross rent every month before putting the rest in my account.

On my statements it says:
Letting Rate: 0.00%
Commission Rate: 7% Of Rent Collected

Doesn't look like the accountant is including that 7% of rent, which is a cost to me, as an expense on the tax return. So I guess it's not tax deductible?

 

[TomEdison]

I think it is tax-deductible and if I were you I'd raise it with the accountant.

(Is there any chance that the figure included in your tax return for rent is the rent, net of commission, that is credited to your bank account? I.e. the accountant is deducting it; he's just not showing it separately as an itemised deduction.)

 

[CharlieMac]

Looking at their table of calculations the accountant adds up a total figure for all the monthly letting agent fees but doesn't use that amount anywhere I can see.

In the calculation of Net Rent they start with the annual gross rent figure (before the letting agent fees have been deducted) and they deduct all allowable expenses but the letting agent fees are not one of them.

It's not clear to me from those Revenue rules if monthly letting agent fees are tax deductible. I'll check with my accountant. Cheers.

 

[T McGibney]

I am checking if the Form 11 Tax Return makes sense with all my costs

It's not just your tax return you need to be looking at but your accountant's calculation of your rental profit/loss. The Form 11 is designed to only give a summary of rental costs with most costs likely to belong under the "other" heading.

Monthly letting agent fees should undoubtedly be tax deductible.