Changing PPR to a rental property

Discussion in 'Property investment and tenants' rights' started by trading_wizz, Mar 8, 2006.

  1. trading_wizz

    trading_wizz Guest

    Hi
    After getting married, I decided to keep on to what was my PPR and rent it out. I never changed my mortgage which was originally taken out for a PPR only.

    Question: since I never actually bought the property as an investment property and just kept my mortgage going, can I still offset my mortgage interest against my rental income??

    There is no specific mention of this in the It70 form from the revenue.ie.
     
  2. ClubMan

    ClubMan Frequent Poster

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    I am assuming that you have taken care of the tax matters (stamp duty clawback if applicable, rental income tax etc.). Check the terms & conditions of the original loan agreement. They may state that any change in use of the property (in particular from owner occupied PPR to rental property) must be notified to the lender so you could be in breach of that agreement although I doubt that the consequences would be significant. If you were continuing to benefit from owner occupied mortgage interest relief at source while the property was rented then you are incorrectly claiming tax relief not due to you and should contact Revenue immediately to stop this and pay back any relief mistakenly obtained. After that you just need to keep a record of your mortgage interest charges and then offset these as an allowable expense against rental income when calculating your liabilities. If in doubt get independent, professional advice.
     
  3. trading_wizz

    trading_wizz Guest

    Thanks Clubman for the quick response. Actually I'm not paying/correction/claiming TRS, since just before I started renting it out, I changed my mortgage to a tracker which meant I got a new mortgage account with the same lender and needed to apply again for TRS which I didn't do. No I didn't inform the lender about the change in "status" of the house but I'm not sure if thats such an offence.
    I just needed to know from the revenue point of view, if because I didn't designate the house as an investor property that I can still claim interest relief on mortgage against rental income.

    Any ideas on a good "affordable" professional advisor?
     
  4. ClubMan

    ClubMan Frequent Poster

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    Paying? TRS (owner occupier mortgage interest relief) is a tax credit/relief that you claim not something that you pay!
    Check the Ts&Cs of your mortgage agreement. Also owner occupier insurance will not cover a rental property and the lender has a vested interest in the property being properly insured as long as they have a claim on the property.
    I don't understand this. If you are seeking to evade tax or your responsibilities (e.g. PRTB registration etc.) then you've come to the wrong place. Note that other threads here mention the possibility that PRTB registration is/will be mandatory in order to claim rental property tax benefits (e.g. allowance to set mortgage interest against rental income etc.).
     
  5. asdfg

    asdfg Frequent Poster

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    Just to let you know that you need to let your insurer know that the house is now let as an investment property.
    You can of course claim the insurance as an allowable expense
     
  6. delgirl

    delgirl Frequent Poster

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    If you are in the Dublin area, I could recommend Liam Kearns, Accountant/Tax Consultant, who I and a fellow landlord use. He's based in Rush, Co. Dublin. His fees are very reasonable and he will meet you in Dublin if necessary. Tel. no. 018071884
     
  7. trading_wizz

    trading_wizz Guest

    Yes I know - my mistake. I don't claim this.
     
  8. trading_wizz

    trading_wizz Guest

    I have the house insured as a rental property with a separate insurance company - so it is covered. My lender actually has a copy of this agreement, so ina sense they know already that it is a rental property.
     
  9. trading_wizz

    trading_wizz Guest

    I wouldn't jump to such assumptions! - my intention here was to make sure that I'm not evading tax. So I'm paying tax for the first time on the house this year and I was seeking advice on my right to claim back tax relief on the interest paid on my mortgage against rental income. And yes I have a PRTB registration already.
     
  10. asdfg

    asdfg Frequent Poster

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  11. ClubMan

    ClubMan Frequent Poster

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    I didn't - that's why I qualified my comments as follows: