Hi,
We emigrated permanently from Ireland to Australia 2 years ago (Sep 03) and we are trying to sort out our tax affairs in Ireland. We have been renting what was our family home in Ireland since the start of this year (jan 05) and would like to keep it long term as an investment.
We know that as a foreign resident landlord we can reduce our tax liability to 20% but we could get this down even further if we were allowed offset our mortgage interest as a deduction.
The tricky issue for us is whether or not we can claim deductions on our total mortgage interest for offsetting rental income since:
1. originally the house was our family home and not bought for a rental property and
2. we refinanced our house earlier in March this year so that we could take some equity out to buy a family home in Australia.
Regarding point 1 - we are not sure what's the official revenue commisioner's ruling but we feel that since we are generating income as a result of having a debt we should be allowed to offset the entire amount. Thats only fair.
Regarding point 2 - we had a small mortgage in Ireland prior to March this year mainly because we made a lot of additional payments into our mortgage from extra income that we received over the previous years. Therefore, when we refinanced we feel that we simple took out the equity that we had originally "overpaid" into the mortgage so we feel that we shouldnt be penalised because we made additional payments and refinanced to take out our own money.
Can anyone please please guide me on whether we are allowed claim mortgage interest deduction or direct me to a professional with specific knowledge of this area?
Thanks,
Bovis
We emigrated permanently from Ireland to Australia 2 years ago (Sep 03) and we are trying to sort out our tax affairs in Ireland. We have been renting what was our family home in Ireland since the start of this year (jan 05) and would like to keep it long term as an investment.
We know that as a foreign resident landlord we can reduce our tax liability to 20% but we could get this down even further if we were allowed offset our mortgage interest as a deduction.
The tricky issue for us is whether or not we can claim deductions on our total mortgage interest for offsetting rental income since:
1. originally the house was our family home and not bought for a rental property and
2. we refinanced our house earlier in March this year so that we could take some equity out to buy a family home in Australia.
Regarding point 1 - we are not sure what's the official revenue commisioner's ruling but we feel that since we are generating income as a result of having a debt we should be allowed to offset the entire amount. Thats only fair.
Regarding point 2 - we had a small mortgage in Ireland prior to March this year mainly because we made a lot of additional payments into our mortgage from extra income that we received over the previous years. Therefore, when we refinanced we feel that we simple took out the equity that we had originally "overpaid" into the mortgage so we feel that we shouldnt be penalised because we made additional payments and refinanced to take out our own money.
Can anyone please please guide me on whether we are allowed claim mortgage interest deduction or direct me to a professional with specific knowledge of this area?
Thanks,
Bovis