Decreasing Income tax on rental property

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Silence69er

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We are currently receiving 1250 per month on our rental property. Our mortgage is roughly 1050 per month. The tax every year is a killer (a little over 5000) and wondering if we decrease our tenants rent to 1050 per month, just to cover our mortgage will we have to pay less tax?

Many thanks in advance.
 
If your income is lower then you will clearly pay less tax.

It would be rather unusual to reduce the rent in order to save tax.

You will sacrifice €200 to save €100 and €100 in repayment capacity.
 
Thanks for the reply Joe. I know it's a rather unusual measure however I need to cut costs and can't see another way of doing it.

Are there any disadvantages im not taking into account.
 
Do you not understand by reducing the rent you lose 100% to save 50% so you are worse off by 50%!!!!!

The reality of investment is that your aim is to make a profit.
 
Silence69er said:
Thanks for the reply Joe. I know it's a rather unusual measure however I need to cut costs and can't see another way of doing it.

Are there any disadvantages im not taking into account.
Click to expand...

Listen to Joe.

If you reduce the rent by €200, yes the tax bill will go down by €100, but you'll also lose €100!

A better approach might be to look at increasing the rent. At the moment, you make €200 per month more than the mortgage, which is €2,400 a year. Your tax bill is €5,000. Every extra €100 you could get would mean an extra €50 to you.
 
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