Renting out a property - all the costs involved
- Thread starter RMCF
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Brendan Burgess
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Hi RMCF
There is an old Key Post on this topic
http://www.askaboutmoney.com/showthread.php?t=5996
After your research, you might like to write a new Key Post.
Brendan
There is an old Key Post on this topic
http://www.askaboutmoney.com/showthread.php?t=5996
After your research, you might like to write a new Key Post.
Brendan
Lots of info here for any landlord new or old.
‘’First Time Landlord’’ should be of particular interest.
http://www.irishlandlord.com/index.aspx
‘’First Time Landlord’’ should be of particular interest.
http://www.irishlandlord.com/index.aspx
Thanks for the replies.
My tenant will have most of the things they need, such as pots/pans, cutlery, beds, curtains, sofa, kettle, etc, since they are coming from another rental property. This takes a good bit of the cost off me at the offset. I may only need to provide some fairly basic things.
The costs I was hinting at was mostly the likes of the registration with PRTB, 2nd property etc, changing insurance etc.
The property will be rented probably from 1st March. Can anyone advise as to the dates by which I would have to pay the NPPR and complete the PRTB registration?
Finally, if the rent you are receiving does not cover the cost of your mortgage on the house, ie you are technically not making a profit, does this have any bearing on tax you are liable for?
Edit: just thought of another question. I no longer get TRS on my property as I have owned it for 10yrs. If I change my PPR to a rental property, does it become liable for mortgage interest relief again?
My tenant will have most of the things they need, such as pots/pans, cutlery, beds, curtains, sofa, kettle, etc, since they are coming from another rental property. This takes a good bit of the cost off me at the offset. I may only need to provide some fairly basic things.
The costs I was hinting at was mostly the likes of the registration with PRTB, 2nd property etc, changing insurance etc.
The property will be rented probably from 1st March. Can anyone advise as to the dates by which I would have to pay the NPPR and complete the PRTB registration?
Finally, if the rent you are receiving does not cover the cost of your mortgage on the house, ie you are technically not making a profit, does this have any bearing on tax you are liable for?
Edit: just thought of another question. I no longer get TRS on my property as I have owned it for 10yrs. If I change my PPR to a rental property, does it become liable for mortgage interest relief again?
When do you become liable to pay the charge?
As set out in the Local Government (Charges) Act 2009, liability to pay the charge is determined on the basis of ownership of the property in question on a single day each year. This date, which is called the "liability date", is 31st July for 2009 and is 31st March in 2010 and future years. The charge must be paid within three months of the liability date (31st October in 2009 and 30th June for 2010) in order to avoid late payment charges.
https://www.nppr.ie/Faq.aspx#fk13
The following is provided for guidance purposes only.
For registration purposes the tenancy commencement date is important as a completed application to register a tenancy must be received by the PRTB within one month from this date for the registration fee of €70 to apply.
If a fully completed application to register a tenancy is not received within this one month period then a late fee of €140 will apply.
https://www.prtb.ie/faq.aspx#Q1
Whether rent covers the mortgage or not is irrelevant, it’s the interest (75%) and other allowable expenses that are deductable from rental income.
http://www.revenue.ie/en/tax/it/leaflets/it70.html
As set out in the Local Government (Charges) Act 2009, liability to pay the charge is determined on the basis of ownership of the property in question on a single day each year. This date, which is called the "liability date", is 31st July for 2009 and is 31st March in 2010 and future years. The charge must be paid within three months of the liability date (31st October in 2009 and 30th June for 2010) in order to avoid late payment charges.
https://www.nppr.ie/Faq.aspx#fk13
The following is provided for guidance purposes only.
For registration purposes the tenancy commencement date is important as a completed application to register a tenancy must be received by the PRTB within one month from this date for the registration fee of €70 to apply.
If a fully completed application to register a tenancy is not received within this one month period then a late fee of €140 will apply.
https://www.prtb.ie/faq.aspx#Q1
Whether rent covers the mortgage or not is irrelevant, it’s the interest (75%) and other allowable expenses that are deductable from rental income.
http://www.revenue.ie/en/tax/it/leaflets/it70.html
I would also be interested to know if its possible to work out roughly how much you will have to pay back to Revenue for every €100 you bring in in rental income.
Would this be possible to calculate roughly?
We both earn enough to take us into the 41% tax band, so I assume the rental income will be taxed at this rate. The interest repayment every quarter for the mortgage on the rental property is approx €375. I know that it might be difficult to calculate but would you be paying Revenue close to €41 for every €100 you earn?
Would this be possible to calculate roughly?
We both earn enough to take us into the 41% tax band, so I assume the rental income will be taxed at this rate. The interest repayment every quarter for the mortgage on the rental property is approx €375. I know that it might be difficult to calculate but would you be paying Revenue close to €41 for every €100 you earn?
Just thought of some more questions, re: the charges/taxes likely that exist/might exist in the future, and who would be responsible for them, landlord or tenant. Here's what I think (am I right)?
Communal grass cutting - Landlord
TV Licence - tenant
Buildings insurance - landlord
Contents insurance - both landlord and tenant
Bin charges - tenant
And possible future charges/taxes:
Water tax - tenant
Property tax - landlord
Communal grass cutting - Landlord
TV Licence - tenant
Buildings insurance - landlord
Contents insurance - both landlord and tenant
Bin charges - tenant
And possible future charges/taxes:
Water tax - tenant
Property tax - landlord
The NPPR tax is not linked to the property being rented. You may currently be liable to pay it depending on the status of the property on the relevant date.
It's better to have your highest mortgage on the rental property and not on your PPR. In this regard I note your mortgage must be low to have so little interest increasing your liability to tax.
There was a thread on here yesterday that had a landlord who'd done out some tax calculations that was pretty good.
The bills you've listed are what most landlords do (though some don't do the grass/garden) You need landlord's house and contents insurance and not all companies do this so it can be tricky and expensive.
Anything you buy should be strong and durable.
It's better to have your highest mortgage on the rental property and not on your PPR. In this regard I note your mortgage must be low to have so little interest increasing your liability to tax.
There was a thread on here yesterday that had a landlord who'd done out some tax calculations that was pretty good.
The bills you've listed are what most landlords do (though some don't do the grass/garden) You need landlord's house and contents insurance and not all companies do this so it can be tricky and expensive.
Anything you buy should be strong and durable.
Thanks for the feedback Bronte.
Re; the low interest payable on the rental property, yes it is quite low. I owe approx €70k on the property and am trying to sell it, but I am preparing for the worst and accepting that I will probably have to rent it. I have just found out that renting in Ireland is by no means a chance to make money. The tax and charges on it are very high and from what I can find out you have to pay approx 45% of your income in tax. Considering the rental amount I will get will not even cover the mortgage each month, I have just to bite the bullet and pay a few hundred myself each month to have the chance to own a 2nd property as an investment in the future.
Getting back to the possible future taxes, when I mentioned property tax, I was not chatting about the NPPR, but the potential for a future property tax that was mentioned in the last budget. A figure of €100 or €200 was mentioned. Water rates would surely have to be paid by the tenant, since they will be using the water after all.
Must go and see if I can find this thread you mentioned.
Re; the low interest payable on the rental property, yes it is quite low. I owe approx €70k on the property and am trying to sell it, but I am preparing for the worst and accepting that I will probably have to rent it. I have just found out that renting in Ireland is by no means a chance to make money. The tax and charges on it are very high and from what I can find out you have to pay approx 45% of your income in tax. Considering the rental amount I will get will not even cover the mortgage each month, I have just to bite the bullet and pay a few hundred myself each month to have the chance to own a 2nd property as an investment in the future.
Getting back to the possible future taxes, when I mentioned property tax, I was not chatting about the NPPR, but the potential for a future property tax that was mentioned in the last budget. A figure of €100 or €200 was mentioned. Water rates would surely have to be paid by the tenant, since they will be using the water after all.
Must go and see if I can find this thread you mentioned.
Can you give more details. What is the rent, value of property, mortgage repayment, expenses in tabular format, like the money makeover section.
What is the general location of the property, is it a good rental area, good area to live in. What is your goal in wanting an investment property.
Property tax will come in but that may not apply to investment properties as there is already the NPPR which is a property tax in itself. No one knows how much the tax will be. The government seems to have stayed away from the investment market (apart from Section 23 and even that's looking like it will be watered down) in the last budget. My guess is that they have realised that many investers are not in a good situation so cannot risk increasing the costs to landlords much more or they will cause a glut of property to be put on the for sale market.
Yes tenant's in the future will be liable for the water charges same as any utility. Don't see this happening for at least 2 to 3 years. Take the governments estimate of the time frame to install meters and multiple by 3.
Revenue have a good general guide on how you calculate your rental income liable to tax.