T
a) Interest rates climb back into double figures
or
b) The A#se falls completely out of the Dublin rental scene.
In effect, the taxman covers me for any increases in interest rates as a deduction against the income tax on my rental income. Am I right or is there something I'm missing ?
Quote
"Interest and other costs are netted off against rental income and tax is paid on the balance. "
If that is the case, which was my original understanding, I would get full relief on the interest paid, not just 42% of it as suggested above !
That's your prerogative, however you also say:I've made one tax return so far and received the relevant relief for interest and other costs (management fee, waste collection, advertising, repairs, etc.) Its hardly rocket science and I believe a good amateur, with the help of AAM and the newspapers, can survive without the help of 'Professionals'.
How then can you evaluate whether you paid too much or too little tax last year, or whether Revenue assessed you correctly? After all, under the self-assessment system, it is your obligation to quantify and pay your own liability. If you pay too much in error, you risk being out of pocket. If you don't pay enough (even inadvertently) you risk the impostion of interest, penalties etcI'm not clear how the taxation calculation is made.
There is always the possibility that the current rules about mortgage interest relief for property investors will be changed by the Govt, or a future Govt. I'm not saying that this is likely (unfortunately), but it is a possibility.
This was a short-term impact of a long-term measure. Unfortunately, the building trade boyos in the FF tent at the Galway Races got Charlie to reverse the measure swiftly. The longer term benefit would have meant a reduction or stabilising of house prices by taking the steam out of the investment market. This would have made houses more affordable for FTB's and reduced demand in the rental market, which would in turn have reduced prices there also.The last time the Government tried this, rents shot up, and the tenants suffered hard.
This was a short-term impact of a long-term measure
In relation to the original issue, it's an oversimplification to say that the measure failed to work as prices continued to increase. That assumes that nothing else changed in the world at that time to account for those increased prices, which is patently untrue. The Celtic Tiger was driving prices rapidly upwards at that time. The real question is 'did prices increase by less than would have happened without this measure being in place?'.
When the Chinese prime minister, Chou En Lai, was asked in the 1950s what he thought of the consequences of the French Revolution in 1789 he replied: “It is too early to say.”
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