How much tax on rental income

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guerngirl

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Hi, i understand that rental income is subject to income tax. How exactly is that calculated.
For example, an apartment that yields 1000 eur a month = 12000 rent per year.
75% of the interest can be offset.
Imagining that leaves 3000 of a balance, how much tax is paid on the 3000? Is it the lower rate of income tax or how exactly does it all work?
Thanks
 
To start with 75% of your mortgage interest is not 75% of your rental income.

Your income tax will depend on your overall tax position as it has to be added to whatever other income you have. This will also dictate the rate you pay as it depends in overall income. In general your rental income can be adjusted for 75% of mortgage interest, management fees, insurance, maintenance, etc
 
Reick said:
And also PRSI from next year? (Not sure of the rate) (2%?).
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PRSI is currently 4%

Landlords who have to file a self-assessment tax return (Form 11) already suffer PRSI on their rental income.

The change next year is to levy PRSI on landlords who are PAYE-taxpayers (Form 12 filers).
 
See this earlier post about what needs to be paid. It's a bit out of date with the tax but gives the gist of what form and what costs are deductable.
 
I gave my accountant my rent and itemised each of my expenditure for him but now he has said that he wants the date of each expenditure....is this really necessary? I've never been asked this before and it's a bit time consuming to be going through my receipts and bank statements for dates.
 
But then would she not just ask me to verify that it is all for 2012. I assume there is no reason to have dates for each expenditure?
 
dark horse said:
I gave my accountant my rent and itemised each of my expenditure for him but now he has said that he wants the date of each expenditure....is this really necessary? I've never been asked this before and it's a bit time consuming to be going through my receipts and bank statements for dates.
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I presume you gave him all the paper receipts when you asked him to do your return?
 
No I just give him the list of expences, he said he doesn't need to see the receipts as long as I verify I have the receipts. So I itemise the expences so he can see what I bought or repaired in case something isn't allowable. Do they need dates....I've changed accountants and I've never been asked for that before.
 
dark horse said:
No I just give him the list of expenses, he said he doesn't need to see the receipts as long as I verify I have the receipts.
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Seems a bit confusing,surely the simplest thing would be to give him the receipts (they are dated anyway) and get them back after he is finished.Certainly cuts down on all this having to manually itemize items & back and forward nonsense.

I have always supplied all my receipts to the accountant,right down to the receipt for €4 for getting a key cut.

You should start a separate thread though.
 
murphaph said:
Except non-resident landlords, who are exempt from PRSI.
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After becoming a non-resident landlord (moved to the UK) could someone please tell me how best to calculate and submit tax returns on the property rented out in Ireland?

If the total rental income for 2012 is less than 75% of interest on mortgage payments + agents fees + insurance etc. would I be correct in saying that there would be no tax payable or is this too simplistic?
 
It's not too simplistic no. If your allowable expenses such as those you mentioned exceed your rental income then there's no profit to tax. You should be able to carry the loss forward though and use it in future years to reduce your tax liability, but I've never had this scenario personally so I can't help much there.
 
As for submitting the returns...do yourself a favour and avoid paper filing like I've been doing. Register for ROS and do it online as mandelbrot advised me to do in another thread. It's pure heartache dealing with them when they keep entering things incorrectly into their system from your paper return.
 
Knuttell said:
Seems a bit confusing,surely the simplest thing would be to give him the receipts (they are dated anyway) and get them back after he is finished.Certainly cuts down on all this having to manually itemize items & back and forward nonsense.

.
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My accountant does not want my receipts, he does this service if one wants, which he considers book keeping but it will cost me more. Some of his clients literally supply him receipts stuffed into a cornflake box etc.

Our arrangment is that I put all receipts into an excel, I divide it into the different categories as well (but that's because I try to understand how the tax system works for rent).

OP should get a binder and each time he pays for something it should be put in the binder in date order, per year. And he should be checking his bank statement monthly and writing on it the items he has purchased, in case he loses a receipt or cannot remember what he bought.
 
murphaph said:
You should be able to carry the loss forward though and use it in future years to reduce your tax liability,QUOTE]

Yes you can carry the loss forward.

Keredez, I advise you to hire an accountant, at least for the first year so that you get things right from the beginning. It won't cost you a lot, and it might save you money, plus it's also tax deductable.
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Thank you all for contributing to this thread.

I am a non-resident landlord and I am late filing for property tax. I was worried about the tax implications.
I am taking from this that as long as my rental income is below my mortgage payment, I do not have a tax liability.

Man, doing the right thing is a lot less stressful when there isn't a massive price tag.

Again, thanks you guys.
 
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