Renting out a property (jointly owned)

[MysticX]

Hi,
Myself and two other family members will be inheriting a property from a deceased relative. The provisional plan is to rent the property out in the long term.

Now we're all normally PAYE though I'm aware that rental income normally merits a self return of some kind so I'm investigating possible options that mightn't require anyone to do that headache of a Form 11 or other tax efficient methods to handle renting out a property.

Looking at Revenue guidelines regarding "chargeable person":

An individual with assessable non-PAYE income of €3,174 or more for any year is regarded as a "chargeable person" for Self-Assessment and must file a Form 11 for that year.

Does this mean if we split the income evenly three ways that none of us have to do a self return in the sense that we'd be below the €3,174 threshold?

Initial estimate is that we'd be renting it out at €650 gross a month before expenses (I'm aware you can claim back certain expenses) so:
€650 * 12 = €7800 / 3 = €2600 each

Thus everyone is below the threshold of €3,174 and can continue to enjoy the simplicity of PAYE?

 

[off the ball]

To avail of the €3,174 exemption you have to have the tax collected through the PAYE system by coding the liability against your tax credits for the year. It's awkward as you will have to know what your liability is going to be for the year, and have it coded to your tax credits before the start of the year

 

[Branz]

To avail of the €3,174 exemption you have to have the tax collected through the PAYE system by coding the liability against your tax credits for the year. It's awkward as you will have to know what your liability is going to be for the year, and have it coded to your tax credits before the start of the year

Its not an exemption, its a threshold so how do you arrive at the above construct, based on this
[broken link removed]

Op: who is the landlord going to be with the PRTB?

 

[Joe_90]

Technically speaking it's an exemption from the obligation to register for self assessment and file a form 11.

Revenue have not in the past been strict on the coding into tax credits but I imagine that will change.

 

[MysticX]

Hi,
Thanks for the replies.

Op: who is the landlord going to be with the PRTB?

Not quite sure yet at this stage. None of us have been landlords before so all this is quite new to us. Does it have to be a single individual registered with the PRTB for the property or are there any advantages to just having a single person nominated for the role? Not sure if it makes a difference but we are planning on using a property management company in the long run.

To avail of the €3,174 exemption you have to have the tax collected through the PAYE system by coding the liability against your tax credits for the year. It's awkward as you will have to know what your liability is going to be for the year, and have it coded to your tax credits before the start of the year

What happens if you overestimate or underestimate for the current year? Do you claim back or pay the outstanding in the following year's tax credits?

 

[mandelbrot]

Hi,
Thanks for the replies.


Not quite sure yet at this stage. None of us have been landlords before so all this is quite new to us. Does it have to be a single individual registered with the PRTB for the property or are there any advantages to just having a single person nominated for the role? Not sure if it makes a difference but we are planning on using a property management company in the long run.


What happens if you overestimate or underestimate for the current year? Do you claim back or pay the outstanding in the following year's tax credits?

You don't do any of that. You each file a form 12 in the following year, and you claim your medical expenses etc at the same time and you make a payment for the balance, OR have the following year's tax credits reduced accordingly. No biggie.

 

[Bronte]

Not quite sure yet at this stage. None of us have been landlords before so all this is quite new to us. Does it have to be a single individual registered with the PRTB for the property or are there any advantages to just having a single person nominated for the role?

Not sure if it makes a difference but we are planning on using a property management company in the long run.

It's much easier if one person is nominated as the person who will register with the PRTB, LPT etc. And to do the account, you then take your profits and expenses and divide by 3.

But you 3 need to clearly understand what you are getting into.

I do not advice on using a property management company, are none of you near the property?

I most definitely advice an account in at least the first year.
Does it make sense to keep the property.

 

[MysticX]

It's much easier if one person is nominated as the person who will register with the PRTB, LPT etc. And to do the account, you then take your profits and expenses and divide by 3.

Hi,
Thanks for replying. So it's best to have a single bank account under our joint names for purposes of managing the property?

But you 3 need to clearly understand what you are getting into.

I do not advice on using a property management company, are none of you near the property?

One of us can be near the property in the short term but can't guarantee it in the long term hence in this matter we really don't have much of a choice.

Does it make sense to keep the property.

Right now yes as one of us wants to keep the option of perhaps moving into it in the very long term.