How to maximise tax relief on PPR and investment property?

Hi,

I own a house in Dublin, worth aprox 380K with 60K outstanding.

I will be moving into my girlfriends house early next year. Her house is bigger and more closer to town than mine.

I plan to rent my house out. I am wondering the most tax efficient way of dealing with this. I presume, because it will become a rental property that I will be able to claim full relief on the interest on the outstanding mortgage?

Therefore, would I be best to reduce the monthly repayments on the outstanding loan (by increasing the term) so that I can maximize the tax relief on the mortgage interest?

Also, wondering what I can write off against tax with regards to existing furniture, white goods etc?

Many thanks,

Cormac

Re: Most Tax efficient renting?

frescoflyer said:

I presume, because it will become a rental property that I will be able to claim full relief on the interest on the outstanding mortgage?

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Correct.

Therefore, would I be best to reduce the monthly repayments on the outstanding loan (by increasing the term) so that I can maximize the tax relief on the mortgage interest?

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Interest only might be a better idea.

Interest only mortgage for investment property

Also, wondering what I can write off against tax with regards to existing furniture, white goods etc?

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See here for some summary info and get professional advice if necessary:

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Re: Most Tax efficient renting?

Thanks for that information.

There's a little voice in the back of my head that always says "Humm, it would be nice to have the house paid off fully though"!!

Cheers,

Fresco

Re: Most Tax efficient renting?

frescoflyer said:

There's a little voice in the back of my head that always says "Humm, it would be nice to have the house paid off fully though"!!

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What do you mean?

Re: Most Tax efficient renting?

Think he might mean that by keeping a repayment mortgage going he will end up owning the property in the end.

Re: Most Tax efficient renting?

But this is less tax efficient than an interest only mortgage and tax efficiency was the nub of the original question...

Re: Most Tax efficient renting?

I am in a similar situation and only found out recently that if you remortgage the property up to the market value you CANNOT rent off that new interest on the mortgage, it has to be the old mortgage interest rate, unless the remortgaging was for extending or renovating the property. Just so you are aware of this.

Re: Most Tax efficient renting?

frescoflyer said:

Thanks for that information.

There's a little voice in the back of my head that always says "Humm, it would be nice to have the house paid off fully though"!!

Cheers,

Fresco

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Go interest only, pay the difference into a pension.

Re: Most Tax efficient renting?

Stifster said:

Go interest only, pay the difference into a pension.

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I too could be in a similiar position soon

when do you decide its time to start paying off the capital, you cant stay on interest only forever or should you wait until the housing market picks up again.

'Pensions are a gimmick' discussion moved to this thread.

I have also amended the thread title.

Would anyone care to set out the pros and cons of the following:

Stifster said:

Go interest only, pay the difference into a pension.

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with reference to the OP's position?