Tax relief on rental income

Hello,

Have looked thorugh revenue websites and various threads here without finding an answer to this question. I am moving from my PPR next month and wil be renting it out. Lets say I get 1500 rent per month and my mortgage interest is 1000 a month. So given there will be only 4 months left in 2008 then my total rental income for year is 6000. Now I know I can write the mortgage interest off against the income for tax purposes, but can I write off the interest for the whole year i.e. 12*1000 = 12000 in which case I need pay no tax or can I only write off the interest for the 4 months for which i am renting i.e 4*1000 = 4000 which means I need to pay tax on 2000. This also may be complicated by the fact that I will have claimed TRS on the mortgage for the first 8 months of the year. Thanks in advance.

Bob

I'd be amazed if you can claim the full year - you can only claim interest in respect of the time it was an investment property. I can't point you to anything official but I'd eat my hat if it was any different.

Sprite

Yeah that would be what I would have thought but the revenue seem to do everything on a yearly basis. Can you ring them up in advance and ask about these things or do you have to submit your tax returns and see what they say.

You should get professional advice if you don't know how to complete and submit your return. Don't expect Revenue to give authoritative information never mind advice. Don't chance your arm with a return if you are not sure about it.

You can only claim 4 months of your interest paid as a deduction. In order to do this you must be registered with the PRTB. If you are renting property out furnished you can claim wear and tear also as a deduction. Contact Revenue for a copy of their IT 70 leaflet. This is a guide to rental income.

Thanks for the replies guys. One more question. I have been caliming mortgage TRS for roughly 3 years. I will be moving out of my PPR and renting a house at another location for maybe a year. I will then buy a house in that location. Once I am living in my PPR again am I eligible again for the last 4 years of mortgage TRS. i.e. does the break in claiming affect my entitlement.

I presume you mean your 7 years of "FTB" preferential relief? If so then you can indeed claim 3 years of this, rent elsewhere and then claim the remaining 4 years once you become an owner occupier again at some point in the future. Once your 7 years of "FTB" preferential relief is up you can claim the lower non "FTB" relief.

HI Bob2810

Basically, you need to do a few things:

1: De-register for mortgage interest relief at source by contacting the TRS Section of the Collector General. You should notify them of the date that you will no longer be occupying the property as your PPR.

2: For the period in 2008 that you are renting out the property you will be entitled to deduct the interest for the period from the rent for that period to calculate the net taxable rent.

3: Section 247 of the Taxes Consolidation Act 1997 says the following regarding first time buyers interest relief:

[”relievable interest”, in relation to an individual and a year of
assessment, means -
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(I) an individual assessed to tax for the year of assessment in
accordance with​

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