Rent as income

C

Ciatie

Guest
I recently decided to take a few years break from my career to spend time with my young children. I'm thinking of investing in an investment property (in my name and as a registered landlord) and have a few questions.

1) Can I claim the rent as my own income?

2) How will I be taxed on the income as we're jointly assessed? What is the position on the tax rates and tax bands? Is it still 38,400 @ 20% Balance @ 42% or can we claim 38,400 @ 20% with increase of 20,400 max. Balance @ 42% with the rental income counted as my income?

Thanks
Ciatie
 
Hi Ciatie,

I'm not a tax expert, but as nobody else has answered you....

1) Yes. But I would think the property may have to be in your name.

2) I understand that you can avail of the advantageous tax bands enjoyed by double earners jointly accessed.

We have put a foreign property in Mrs. DonKings name for the above reasons.
 
Ciatie,

To be honest the chances of you making a profit in the first few years is slim.
By the time you factor in mortgage interest, fixtures and fittings, maintenance costs, fees for letting, management fees etc. These are all yearly costs.

Add to that the initial costs of stamp duty, solicitor fees.
Think carefully and do the figures before jumping in and expecting to make a profit straight away.

In answear to your questions:
1) Doesn't really matter as your jointly assessed.
2) See above, I reckon for the first few years you will be carrying forward a loss.
 
brigade said:
Ciatie,
To be honest the chances of you making a profit in the first few years is slim.
By the time you factor in mortgage interest, fixtures and fittings, maintenance costs, fees for letting, management fees etc. These are all yearly costs.

Add to that the initial costs of stamp duty, solicitor fees.
Think carefully and do the figures before jumping in and expecting to make a profit straight away.

In answear to your questions:
1) Doesn't really matter as your jointly assessed.
2) See above, I reckon for the first few years you will be carrying forward a loss.
Click to expand...

1) Yes, it does matter - if your partner is already paying 42% income tax and the property is titled in your name, you can claim the rental income as your only source of income
2) You will be able to avail of the full E58,800 band at 20%.

Whether or not you realise a profit will depend on the level of mortgage required, location of the property, rental market etc. I purchased a second rental property in January this year and am making a profit on it.

I would recommend that you get some professional financial advice before getting into property investment and wish you luck!
 
Didn't realise rental income could be treated this way if jointly assessed.

Does this still apply if the property is in both names, i.e if wife is not working, can she claim the rental income as her only source of income to avail of the tax bands?
 
Hi brigade, the property would have to be titled in the non-earning spouse's name - if it were in both names, any profit from rental income would be added to the working spouse's earnings and, if the band applies, taxed at 42%.

We have 'joint mortgage, sole title' arrangements for our rental properties which allows us to avail of the E58,800 @ 20%.

If a property was originally registered in both names it's fairly straightforward for a solicitor to change the title, provided the mortgage lender agrees, and should cost around E500.

There are also no tax complications as asset transfers between spouses are exempt from tax.
 
You must log in or register to reply here.
Back
Top