Would welcome thoughts on this
i own a house in south county dublin which i rent out. should I sell to realise some equity, payoff some debt and potentially buy a lower value property via a company as it’s more tax efficient(or at least allows me to defer income)
Key details are as follows (approximate figures)
Current value is €575k
Mortgage of. €100k
capital gain tax €30k (reduced as property was ppr for a number of years)
Current rent role €26k pa
so net proceeds would be about €440k
i reckon I could by a property for around €400k which would have a rent role of €21k
id use the other 40k to clear the mortgage on my current ppr, interest about 2.75% pa I think
so I’d be down around 5k gross before tax
however if I bought the property via a company I assume I could defer paying tax on rental income (currently I pay around 50% of rent in tax) and the property I would buy is likely to have lower maintenance costs
Other points
The current mortgage is a very! cheap tracker mortgage but I’d clear two loans I have
Both myself and spouse currently maximise our pension contributions however we have taken on some extra liabilities recently so it would be nice to reduce outgoings by €1.5k per month (current mortgage on property plus mortgage on our ppr)
main reason for buying another property is yield generation for retirement, not too bothered about capital appreciation (or losses)
also buying a lowe value property might actually lead to a more guaranteed income stream e.g. if rent is paid by hap or similar
i own two other properties which I rent out which I’d love to get into a company structure too to reduce my annual rent liability but I assume no easy way to do this other than sell and buy new properties via a compan…
as above I’d welcome any thoughts on this. Is it a reasonable idea. Am I missing something obvious or not?
thanks in advance
Cameo
i own a house in south county dublin which i rent out. should I sell to realise some equity, payoff some debt and potentially buy a lower value property via a company as it’s more tax efficient(or at least allows me to defer income)
Key details are as follows (approximate figures)
Current value is €575k
Mortgage of. €100k
capital gain tax €30k (reduced as property was ppr for a number of years)
Current rent role €26k pa
so net proceeds would be about €440k
i reckon I could by a property for around €400k which would have a rent role of €21k
id use the other 40k to clear the mortgage on my current ppr, interest about 2.75% pa I think
so I’d be down around 5k gross before tax
however if I bought the property via a company I assume I could defer paying tax on rental income (currently I pay around 50% of rent in tax) and the property I would buy is likely to have lower maintenance costs
Other points
The current mortgage is a very! cheap tracker mortgage but I’d clear two loans I have
Both myself and spouse currently maximise our pension contributions however we have taken on some extra liabilities recently so it would be nice to reduce outgoings by €1.5k per month (current mortgage on property plus mortgage on our ppr)
main reason for buying another property is yield generation for retirement, not too bothered about capital appreciation (or losses)
also buying a lowe value property might actually lead to a more guaranteed income stream e.g. if rent is paid by hap or similar
i own two other properties which I rent out which I’d love to get into a company structure too to reduce my annual rent liability but I assume no easy way to do this other than sell and buy new properties via a compan…
as above I’d welcome any thoughts on this. Is it a reasonable idea. Am I missing something obvious or not?
thanks in advance
Cameo