Is a new boiler tax deductible?

C

Carmar

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Just another question about a rental property. We replaced the boiler in a newly acquired rental property as it was very old and not efficient. It was replaced after tenants moved in, so it was not a pre-letting expense. Would such a replacement be a capital allowance and so deductible over 8 years against rental income? I don't think that it was an improvement as it was not a combi-boiler, just the same type of boiler as before. Many thanks for any information.
 
In practice you can pretty much do what you like, I don't think I've ever seen a rental computation queried by Revenue. Even a few years ago when the interest was restricted to 75% I don't recall ever getting a single query from Revenue asking to prove that the interest had in fact been restricted correctly. Came across a few people just claiming the 100% interest as normal and getting away with it no problem too. Rental income doesn't seem to be a priority TBH
 
DB74 said:

the bottom of page 6 states "a ‘repair’ means the restoration of an asset by replacing subsidiary parts of the whole asset"
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1. That document is 8 years old and most likely is no longer in use.

2. That definition doesn't make a whole lot of sense. If a repair can be done without replacing a part, it suddenly doesn't stop being a repair.

Otherwise I'd have considered repairs and equivalent replacements to be pretty much synonymous.
 
A boiler for a rental property is generally considered a capital allowance rather than a repair.

This is because it represents a significant investment that adds long-term value to the property, rather than merely maintaining its current condition.

Capital allowances can be claimed at a rate of 12.5% annually over eight years for such items, as they are classified as having a long-term benefit to the property

In contrast, repairs typically involve costs incurred for routine maintenance and upkeep
 
DB74 said:
In practice you can pretty much do what you like, I don't think I've ever seen a rental computation queried by Revenue. Even a few years ago when the interest was restricted to 75% I don't recall ever getting a single query from Revenue asking to prove that the interest had in fact been restricted correctly. Came across a few people just claiming the 100% interest as normal and getting away with it no problem too. Rental income doesn't seem to be a priority TBH
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I thought that until I had a query on basically this point from Revenue. My accountant said the Revenue has tools to review tax returns which flag up unusual ones. That it doesn't require a human review. I had expenses several items which were potentially capital.

The hassle involved in getting them the info they requested was worse than paying the tax upfront.
 
cally1990 said:
A boiler for a rental property is generally considered a capital allowance rather than a repair.
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Under what heading?

My understanding is that for rental properties, capital allowances are available only in respect of furniture and fittings.

I'd have counted a boiler as a fixture and thus falling outside this description.

This is the relevant summary on Revenue.ie
Capital allowances
You can claim capital allowances on the cost of furniture and fittings in your property. This is known as ‘wear and tear allowances’ or ‘depreciation’.

The current rate for these allowances is 12.5% of the cost per year, for a maximum of eight years. The allowances may include:

furniture you purchased for your rental property
and
the cost of the purchase of white goods such as a fridge or a dishwasher.
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