New landlord living abroad

tablesalt

Registered User
Messages
70
Hi,
I know there have been a number of treads similar to my question, I read a number of posts, but still a bit unclear. Any information is greatly appreciated!
Both myself and my husband are currently residing abroad - he works, but pays income taxes in the country of our current residence. I do not work. Therefore neither of us are PAYE.
We have just rented out our family home for much less than the mortgage repayment (almost half of our monthly mortgage payment). This is due to house value great depreciation and some other aspects.
We are not using any agency as we know the tenants personally.
I understand that I need to register as a landlord. Can you please advise if we have to pay any income tax if the mortgage repayment is much greater than our rental income?
Thanking you in advance!
 
You are liable to tax on the profit.

75% of the mortgage interest you pay and 100% of other costs can be deducted from the rent in calculating the profit.

That is 75% of the interest element of your mortgage payments. Not 75% of the total mortgage payments.

The profit is taxable at your marginal rate. You will get a personal allowance, so the actual amount of tax you pay may be low, if you have no other income.

The tenant should deduct part of the rent called withholding tax. They pay this to Revenue and you can claim it back. I am not sure in practice if this ever happens.
 
You are liable to tax on the profit.

75% of the mortgage interest you pay and 100% of other costs can be deducted from the rent in calculating the profit.

That is 75% of the interest element of your mortgage payments. Not 75% of the total mortgage payments.

The profit is taxable at your marginal rate. You will get a personal allowance, so the actual amount of tax you pay may be low, if you have no other income.

The tenant should deduct part of the rent called withholding tax. They pay this to Revenue and you can claim it back. I am not sure in practice if this ever happens.

Sorry to have to pick a few holes :)

The standard rate of 20% applies to rental income earned by a non-resident. There is no PRSI. USC may apply if the income is high enough - in most cases it isn't.

The personal tax credit doesn't apply unless the taxpayer is earning little or no income abroad.

The withholding tax is easily avoided by appointing a tax 'collection agent'.

See my blogposts for more: http://mcgibney.ie/2012/12/24/irish-property-living-abroad-what-to-do-about-tax/

http://mcgibney.ie/2013/03/14/non-resident-landlord-how-to-appoint-tax-collection-agent/
 
The personal tax credit doesn't apply unless the taxpayer is earning little or no income abroad.

Is it not allocated as a percentage? For example, my Irish tax return was made up 90% of my foreign income and rental profit in Ireland represents the other 10%. My tax calculation on ROS allocated my 10% of the Personal Allowance.

This is why I added the last post to my thread below:

http://www.askaboutmoney.com/showthread.php?t=186187
 
Back
Top