New House - Renting it Out - Tax Implications

S

SNOOP101

Registered User
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Hi,

I've recently purchased a house and being a FTB I paid no stamp duty on it.
I intend renting it out straight away as I've recently moved in with my girlfriend. (I'm paying her cash towards her mortgage)
Where do I stand tax-wise if I rent it out ?
I'm thinking of renting it to social welfare for €1,200 a month yet my mortgage will only be around €850.
How snookered am I ?
What can I write off against this ?
Should I look to up the amount I'm paying off against my mortgage ?
Do I have to declare my rent if I get someone who's not going to look for rent relief ?
 
Firstly you will owe stamp duty at investor rates immediately.
What can I write off against this ?
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You will get tax relief on the interest of the mortgage plus you can get relief on other things like management fees, wear and tear etc. which an accountant would be your best bet.
Do I have to declare my rent if I get someone who's not going to look for rent relief ?
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Yes - its tax evasion and against the law not to.
 
So to avoid paying the stamp duty I should move into the house for a few weeks, then move out ?
 
Thanks Stuart, didn't realise the mess I could get myself into.
Could I just rent out the 2 doubles and leave the box room in my own name ?
That way I could avail of the rent-a-room scheme
 
The max you can get under the rent-a-room scheme is €7620 a year (works out at €635 a month).
 
And if you do rent-a-room rather than conventional renting, you can't offset wear and tear, management fees etc. as expenses.
 
Could I just rent out the 2 doubles and leave the box room in my own name ?
That way I could avail of the rent-a-room scheme
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It's not just a question of 'leaving the box room in your own name'. According to Revenue:
A “qualifying residence” [for rent a room] is a residential premises in the State, which is occupied by an individual as his/her principal private residence during the year of assessment.
Yout could be putting yourself in a vulnerable position if you don't live there at all, and a tenant develops a grudge.
 
Cheers Cobalt,
Looks like that option is out..
The house I bought was 2nd hand but falls under the stamp-duty threshold.
Will I just get taxed at 42% for the amount of rent I get minus my mortgage minus wear and whatever I spent furnishing it ?
 
Sort of. It's your mortgage interest payments that you can set against tax, not capital repayments. The wear and tear allowance for furniture is spread over 8 yrs (12.5% each year), not all straightaway.

Have a look at the [broken link removed] - it's fairly detailed.
 
The other downside of renting is you'll get charged capital gains tax on your profit if you sell the house. Your PPR would be exempt from CGT if unrented.(Rent a room doesn't mess up the exemption.)
 
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