Reluctant Landlord - all items to consider

square1

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Hi all,

I have read through a number of threads here but cannot seem to find a catch all for someone in what I imagine is a common situation.

My partner and I own an apartment and with a growing family now need to let it out and rent a larger property.

Much of the information I have read relates to renting and buying a second property rather than rent a new property. I'm not sure if there are any tax/insurance implications as a tenant.

Questions on 'new' rental property:

Firstly - in regard to the property we will rent, would it be usual to just transfer the address on our exisiting contents insurance? We have taken all of our property and will re-furnish the apartment.

Are there any other things to consider when becoming a tenant? Are there any tax reliefs available etc?

Quesitons on 'old' Apartment to rent out

Tax - I think I understand how this works, will we loose the interest relief at source even though we are not buying another property?

Insurance - Do we need to provide insurance for the tenants? The buildings are covered under block insurance which is provided as part of the management fees.

Insurance on the mortgage - we have some kind of policy with Caladonia (will find out what this covers and update). Do we still need this? Or if not do we need something different now?

PRTB - I understand we will need to register the tenancy.



Anything else to consider?
Essentially if we were not going to have to crystalise 150K in negative equity if we sold the apartment then there is no way on earth I would want to become a landlord, I dont feel we can take that hit so this is our course of action.
Are there any reliefs available for people in this situation? We will still have a tax liability even though we will need to put 500 euro a month to the mortgage.

Is there anything I'm missing? I've looked at tax, insurance and PRTB.

Thanks a lot for taking the time to read and thank you in advance for any response.

Edited to add: We bought in May 2006, so have had the apartment for eight years, I'm pretty sure that we have now gone past the stage of any stamp duty clawback - am I right on that? We were FTB and it was a new property so we had no stamp duty liability at the time. TKS
 
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square1 said:
will we loose the interest relief at source even though we are not buying another property?
Yes.

Insurance - Do we need to provide insurance for the tenants? The buildings are covered under block insurance which is provided as part of the management fees.
Insurance cover on an investment property (or in this case a non-PPR) will differ from the cover you have at present. You'll have to discuss with your insurer.
 
>> Insurance - Do we need to provide insurance for the tenants? The buildings are covered under block insurance which is provided as part of the management fees.

You won't need to insure the tenant's things per se, but you'll need to insure yourself for liability for the tenant's things and general liability. In other words for damage to the tenant's things and person that is legally your fault (or liability). You'll need landlord's insurance, so discuss with your insurer. You can of course declare this as an expense against tax.

>> Firstly - in regard to the property we will rent, would it be usual to just transfer the address on our exisiting contents insurance? We have taken all of our property and will re-furnish the apartment.

If the insurance company allows it, it sounds reasonable, but I don't know if they will.

>> Are there any other things to consider when becoming a tenant? Are there any tax reliefs available etc?

I don't think there are.

You'll be paying tax on the rent from the place you own, but you'll have no tax relief on the rent you pay yourself. It's tough. There is a big tax efficiency to living in the place you own. The relative tax-inefficiency of renting hurts someone like you, I'm sorry to say.
 
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