Out of State landlord

[pizzzaguy]

I am currently living in the States and I have a house rented in Ireland. I only started to rent this recently, so I am trying to figure out the correct way to handle my taxes.

I have read on the Revenue site that I need to either have the tenant withhold 20% of the rent and they then pay that to Revenue or else I set up an in-state agent who collects the rent for me, withholds 20% and is then chargeable for that 20%.

I don't think I want to use the tenant withholding the rent approach, so I'm trying to find out more about the agent idea.

No accountants or property management companies that I've talked to know anything about this or even do it for their out of state landlords.

I am not even making any profit on the rent yet - so I won't actually owe any tax, but I would like to do this properly so that I can claim all my losses against furure profit and also so I can claim credit on tax paid in Ireland against US tax owed once I do start making a profit.

Does anyone know what is the best thing to do here? I believe I can nominate a family member, for example to be my agent - but I'm not sure that I want to put a family member in this position.

Also - if I use an agent and they withhold 20% of the rent, since I won't owe any tax, how will I get this 20% back - will it be in the form of tax credits or cash. If it is in tax credits, I won't see the benefit of it for a long time, until I start making profit/income in Ireland again.

Any help would be appreciated.

 

[ClubMan]

I am not even making any profit on the rent yet

Calculated in what way exactly? I just ask because so many people seem to assume that not making a profit means that the (annuity) mortgage repayments exceed the rent when this is actually irrelevant. What matters is what the result is of rental income minus allowable expenses including mortgage interest but not capital repayments. Apologies if this is obvious to you but seemingly it's not obvious to a lot of other landlords!

 

[pizzzaguy]

Understandable question, but in my case I think it is pretty clear cut. Right now the rental income is less than the interest repayments. I am even on an interest only mortgage but I still end up contributing a small amount every month myself to just cover the interest repayments. So, as you can see, I am not making a profit on the rent.

 

[alfabeta]

You can nominate anyone who is resident in Ireland as a Collecting Agent but they will need to be allocated a seperate PPS number for the purpose of them being the collecting agent and this is the number that your annual Income Tax Return is submitted on. Also, have you resigered with the PRTB as you will need to do this to have the your interest associated as an expense.