Fulltime Landlords.

C

Cashmere Solo

Registered User
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Hi Folks,
I recently heard a statistic on radio whereby the figures given were that most small landlords had fulltime jobs and that the properties they let were more or less a passing interest / pension pot or other!
Currently as per revenue guidelines you cannot expense your work in the maintenance of properties! My question is how can you become a professional landlord as your main employment if Revenue T&Cs' dont allow?
Am I missing something?
 
I am confused by this.

1) You cannot set the cost of travelling to your property against your taxable rental income.
2) But surely you can set the cost of maintaining a rental property against the taxable rental income?

Update: Do you mean that you cannot charge for your own time in fixing properties?

Brendan
 
Cashmere

I am not sure what your problem is?

If I run a corner shop, I have revenue and costs. The difference is the profit which makes me a professional shopkeeper.

If I own 50 properties, I will have rental income and costs. The difference is the profit which should be enough to make me a professional landlord.

The term "professional" probably doesn't have any significance here. It just means that it is my main income.
 
Brendan Burgess said:
Cashmere

I am not sure what your problem is?

If I run a corner shop, I have revenue and costs. The difference is the profit which makes me a professional shopkeeper.

If I own 50 properties, I will have rental income and costs. The difference is the profit which should be enough to make me a professional landlord.

The term "professional" probably doesn't have any significance here. It just means that it is my main income.
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Hi Brendan

If you run 50 corner shops, you will incur significant administrative costs. With a few exceptions, all these costs are allowable for tax purposes. (It would be a nonsense for example if the costs of running Musgraves or Dunnes HQ were disallowed.) You will pay 12.5% Corporation Tax on the remainder.

Yet if you rent 50 properties, almost all of your administrative costs are disallowed. You will pay 45% Corporation Tax on the remainder.

The mentality behind the tax treatment of rental income dates from De Valera's time. It's bonkers.
 
T McGibney said:
if you rent 50 properties, almost all of your administrative costs are disallowed.
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Hadn't realised that.

If I have a company with 50 properties and employ two staff to run them, are the costs of the staff disallowed?

I assume not. So what sort of admin costs are disallowed that one might expect to be allowed?

Brendan
 
Brendan Burgess said:
Hadn't realised that.

If I have a company with 50 properties and employ two staff to run them, are the costs of the staff disallowed?
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Yes.
There's a small allowance, allowed only by concession I believe, for management costs but that's it
Brendan Burgess said:
I assume not. So what sort of admin costs are disallowed that one might expect to be allowed?
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As I understand it, pretty much everything apart from the above outside the normal few expense item categories that every landlord can claim.
 
Folks thanks for the replies, lately I find that I am spending time at evenings and week-ends doing loads of odd jobs and prepping houses for the Council Inspections. I do enjoy the work and maintain the properties to a high standard, but I dont think that I could earn a wage from it if I were to retire early from my current job. That was my initial question - could I set up as a business and make this my fulltime occupation - it looks like the answer is no:(
 
Cashmere Solo said:
That was my initial question - could I set up as a business and make this my fulltime occupation - it looks like the answer is no
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That is not primarily a tax issue.

Will the rent cover the costs sufficiently to pay you a wage higher than you would earn otherwise?
It would also have to cover the return you could otherwise earn on your money.

I think you would need a fair few properties to justify becoming a fulltime landlord.

Brendan
 
Cashmere Solo said:
Folks thanks for the replies, lately I find that I am spending time at evenings and week-ends doing loads of odd jobs and prepping houses for the Council Inspections. I do enjoy the work and maintain the properties to a high standard, but I dont think that I could earn a wage from it if I were to retire early from my current job. That was my initial question - could I set up as a business and make this my fulltime occupation - it looks like the answer is no:(
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If you're main goal is to draw down a wage from the rental properties, you're better off having the properties in your own name. I'm a landlord, I've stopped working 9-5 and rely on rental income as my main revenue stream for day to day activities and that's the way I'm doing it after getting advice from some experts. Yes, there are several drawbacks to being a "professional" landlord. There isn't a lot of legislation in our favor, taxes are high and there isn't much to write off against it, but depending on your personal circumstances, it can be lucrative. I have not had to borrow to purchase the properties and that's a key difference in it being a lucrative venture or struggling to stay ahead... in my humble opinion anyway.

Edited: removed a paragraph as there was information there that isn't correct.
Point is, there doesn't seem to be any justification in having your property in a company if you ever want to get the money back out!
 
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Always Learning said:
If your goal is is accumulate wealth, but not draw it down, then there are benefits to starting a company and keeping the properties in there and allowing the money to build up as you flip the properties or build up money from rent. You will pay circa 25% tax in this instance. However, if you have them in a company and wish to draw down a wage, you will have to pay corporation tax of circa 25% and then income tax on top of that to draw a wage from it. Which doesn't make economic sense.
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This is completely wrong.
 
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