What tax on rental income

S

sidb

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I am looking to rent out a property for first time.

Mortgage is 1000 a month
Interest is 1.75%
rental per month is 1250.
35 year mortgage
25 years left.
Tax relief off 150ish but up next year.

Can someone do the figures on the year of the amount of tax I would pay on this. Two of us work. Im on the higher rate of tax and partner is on the lower rate of tax. No clause in mortgage contract of not allowing to rent out with tracker. Also how in gods name can you make money on rental with the tax man trying to take every cent off you. Not landlord by choice. Just another unlucky one caught by the greed of people in this country. If my partner goes down on contract can they pay the lower rate of tax. Need to know all loop holes by the book. Thanks.
 
Don't think you provide enough info
E.g. what is the mortgage amount so that the interest payments per month can be calculated.
I presume the tax relief is owner occupier mortgage interest tax relief which you will lose anyway if/when you rent?
Bear in mind that you may need to review your home insurance if you rent the property out.
And you may be subject to CGT on some portion of any eventual gain when you resell.
I think you should get professional advice if you are considering renting the property out.
How do you make money on renting property? By having a business plan and making it work. And not doing it if it doesn't. Don't be an "accidental landlord" (sigh...) if it doesn't make business sense.
I don't really understand your comments about others' greed or "loopholes".
 
Mortgage is currently at 288k
I will seek professional advise to make sure im covering all angles legit.
 
Rental is no different than any other business, from a "tax man trying to take every cent" perspective. The only difference is that you can only deduct 75% of the mortgage interest if letting a residential property.
 
sidb said:
. Also how in gods name can you make money on rental with the tax man trying to take every cent off you.
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That's a statement of fact. I've been looking for years now to reinvest and the returns don't justify it.

You can deduct 75% of the mortgage interest.
All costs, advertising, repairs, gardening costs.
You get an allowance for wear and tear on the furniture (beds, fridge etc)
If you pay an agent that is deductable
Costs of accountant deductable

I'm not doing the figures but you'll still probably not make enough to not have to need some of your own salary to subsidise it.

Good that you are hiring an accountant. Even so come back on here and double check your expert has covered all bases.

I'd stay away from letting agents. Not worth the money, and you'll still be left with the hassle.

Be sure to register with the PRTB. Pay the LPT. I assume as it's a joint house that the profits will be split 50:50 so one of you will be paying full tax on 'profit' even though there might not be a profit. Add in USC and PRSI.

There are loads and loads of threads on this, have you had a look at them.

Why don't you sell - as you mentioned accidential - is there another way? Full financial details needed on everything if you want more advice.
 
Bronte said:
I've been looking for years now to reinvest and the returns don't justify it.
Click to expand...

Indeed. I think a lot of long term landlords are still in property only because they can't stomach the capital gain tax hit they would take if they sold up.
 
Thanks for updates. Property is in negative equity so not worth selling but good thing is have a tracker but bad thing is interest rates will be very low for the 75% interest rates deductible but put in the hard work and make it work which I don't mind. A good accountant is the next step.
 
sidb said:
Thanks for updates. Property is in negative equity so not worth selling but good thing is have a tracker but bad thing is interest rates will be very low for the 75% interest rates deductible but put in the hard work and make it work which I don't mind. A good accountant is the next step.
Click to expand...
 
I believe a good letting agent is invaluable. I have been using the same agent for 10 years - he will

1. Meet and interview potential tenants.
2. Check bank ,work and previous landlord references.
3. Transfer all utilities i.e. gas , electricity , broadband , tv channels, landline , waste and water charges.
4. Complete PRTB forms with tenant and post forms with cheque to PRTB.
5. Return deposit to previous tenant if property is left in good condition.
6. Complete a comprehensive fixed term contract.
7. Hand over keys and maybe get extra keys cut if necessary.
8. Explain how central heating , cooker , burglar alarm works to new tenant.
9. Complete a standing order for monthly rent payments and deliever it to the tenant's bank.
10. Deliever all paperwork and monies by hand to landlord.

All this for 6% of the annual rent .

I also use the same agent for managing some of my apartments which is also 6%.

I rest my case
 
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