Allowable Expenses - 3 bed investment property

Banquo

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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?
 
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
 
Revenue would not flag this as it's only 500 euro and even then you have a perfectly plausable explanation should you be audited.
 
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.
 
Do people claim expenses for travelling to and from a property for repairs or while vetting people for new lets. Any thoughts
 
Seems unfair if you cannot claim reasonable mileage to inspect property, handle handovers etc. You can in Germany (where your own labour is also not allowable). It's a real expense you have to incur as a landlord.
 
Add that to a long list of other unfair tax provisions on landlords.
- non deductibility of LPT
- non deductibility of NPPR
- non deductibility of some interest (now repealed)
- inability to make pension contributions from rental income.
 
You can make pension contributions from rental income, but you cannot claim tax relief on contributions from unearned income
 
Seems unfair if you cannot claim reasonable mileage to inspect property, handle handovers etc. You can in Germany (where your own labour is also not allowable). It's a real expense you have to incur as a landlord.
You know what would happen if it were allowed, right?
 
If a rental property is being sold can you deduct the solicitor fees and estate agent fees on a tax return?
 
It would be easy enough for Revenue to build an algorithm into their systems to compare the number of properties rented with the home address of the landlord and the amount of mileage being claimed. Anything more than say 2 visits to the property a year might cause a flag to be raised to look at the return more closely (still using automation). If there is no higher than usual maintenance compared to previous years and no new RTB registration (could easily add that as a separate field) then maybe something is up and the return should be checked by a human or the taxpayer requested to explain the visits to the property. Inspecting the property more than say once or twice a year could even be excluded in the legislation (at least for residential lettings).
 
Sure. Landlords would be on a par with any other self-employed taxpayer. Problem?
The problem would be that many landlords would come up with urgent reasons for regular monthly visits to their properties on the other side of the country, and any synchronicity with gigs, sports events, holidays at those locations would be entirely coincidental, so taxpayers would end up subsidising such travel. It would be extremely difficult to manage and validate such travel.
 
See my post above. I can claim mileage on my German rental property and I don't put in any fake trips. It would be easy enough to filter out suspicious mileage entries for a closer look. With Eircodes it should be trivial these days.
 
There are lots of businesses where tax evasion is much more difficult to detect and nobody bats an eyelid. Landlords are unfairly demonised by government, Revenue and the media. On Newstalk right know for example.
 
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