Allowable Expenses - 3 bed investment property

Banquo

Registered User
Messages
62
Hi,
I recently bought a 3 bed house as an investment (mortgage payment 2000 per month). I had intended to rent it room by room and had someone take 1 room @500 almost immediately but due to unforseen circumstances they moved out after 6 weeks. I've now decided to let it out as a whole house. I was checking on revenue.ie regarding allowable expenses and I'm concerned that I will not be able to use the mortgage payments to date as allowable expenses. The language of concern is

Expenses not allowed include "expenses on premises rented out on an uneconomic basis, where it is not possible to make a profit from the rent received".

Anyone any thoughts?
 

Banquo

Registered User
Messages
62
Only the interest portion of mortgage repayments is allowable, not the full amount
Yes thats correct. But my question is different. Preletting expenses are not allowed. The first let of the house was 1 bedroom for a short time. Does this now trigger the qualification of letting expenses ??? Or does the fact that it could be deemed an uneconomic letting disqualify it? Per the language I quoted above
 

elcato

Moderator
Messages
3,682
Revenue would not flag this as it's only 500 euro and even then you have a perfectly plausable explanation should you be audited.
 

Banquo

Registered User
Messages
62
Revenue would not flag this as it's only 500 euro and even then you have a perfectly plausable explanation should you be audited.
Thanks for your rpeky. so if I can summarize. The initial letting short as it was has triggered from tax perspective that the property expenses are allowable and size of rent collected so far would not fall foul of the economic rent requirement.
 
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