Buying to Let - Tax issues?

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krinpit

Registered User
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Hi, this is my first post on this forum.

As a regular PAYE worker, if I was to buy an apartment and let it out
what proportion of the rent would I lose in tax (assuming that I don't actually live there myself)?

Appreciate your input.
 
Hi

If the Apartment was 300K.
You can offset the interest portion of the mortgage against the
rental Income.
The Apartment = 300,000
Interest Repayment based on 3.5% interest rate.

Rental Income 12,000
Less Expenses
Mortgage Interest only 10,500
Fixtures & Fuittings 625
Insurance 300
Bins 300
These are main expenses.

Total Expenses 11,725
Profit 275
Tax @42% if you are a high rate tax payer

Any queries please give me an email as I'm a mortgage broker and i can go through it in more detail.

[email protected]


 
Paraic,

What about the health levy of 2% in addition to the 42%!

Am I the only person who pays 2% health levy on rental profit?????

Please somebody confirm you have to pay 2%!!!
 
You really should get an accountant to make sure that you are meeting your tax liabilities - no more, no less.
 
krinpit said:
Hi, this is my first post on this forum.

As a regular PAYE worker, if I was to buy an apartment and let it out
what proportion of the rent would I lose in tax (assuming that I don't actually live there myself)?

Appreciate your input.
Click to expand...
do you have any other investments? maybe property isnt the best investment for you in the current environment?do you have a pension? do you think there might be too many apartments on market in next few years? dont rush into buying a rental property in this market.
 
Paraic
In view of your offer to help krinpit I think it may be in order for you to clarify to AAM what form of broker you are?
I feel it would be more informative if you could give your exact status prior to offering help e.g. tied agent y/n or multi agency or fee based etc.
 
NEVER rely on mortgage brokers for tax advice - unless they hold appropriate tax or accountancy qualifications and/or are members of an appropriate tax or accountancy professional body.

Otherwise, you will have absolutely no comeback against them for the consequences of bad or misleading advice.

In any event, a mortgage broker is hardly a sufficently independent person to dispense advice such as this.
 
ClubMan said:
You really should get an accountant to make sure that you are meeting your tax liabilities - no more, no less.
Click to expand...

I actually got/get advice from a friend of mine who works in revenue. I'm beginning to feel that his advice is strictly by the book and in practice nobody pays the 2% health levy on rental income and revenue don't seem to be bothered to follow it up.

On my last return I actually made a calculation error on an excel sheet I sent in, I charged myself 20% instead of 2% for the health levy. I spoted my mistake a little later but before I got around to looking for a refund, a check for the 18% excess was returned.

I had hoped that something as basic as paying a health levy on rental profit would have either been challanged or verified on this forum.
 
DonKing said:
I actually got/get advice from a friend of mine who works in revenue.
Click to expand...
Your friend could simply be wrong. I have received incorrect information from Revenue employees in the past. They are not authorised to give tax advice - just to disseminate tax information and they sometimes make mistakes. When they do this they will not accept it as a defence against making incorrect returns. If I was you I would get independent, professional advice.
 
ClubMan said:
Your friend could simply be wrong.
Click to expand...

Thats true.

Yeah I think I will have to start putting out the feelers to find a reliable, authorised tax consultant/advisor.

In the meantime I would appreciate if anyone could comment on the 2% health levy!
 
As a matter of interest don i pay an accountant to do my taxes every year and i also pay the health levy if thats any help to you. I go to IFAC and they do my accounts to perfection.
 
seánieboy said:
As a matter of interest don i pay an accountant to do my taxes every year and i also pay the health levy if thats any help to you. I go to IFAC and they do my accounts to perfection.
Click to expand...

Seánieboy,

Are you referring to tax on rental income profit?

Many thanks
 
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