However, it looks like I will have to pay Revenue approx 50% of my rental income in tax each and every year (41% + 4% PRSI + 7% USC?). Then add to this costs such as NPPR tax, PRTB registration, increased landlord insurance, upkeep of 2nd house, future property and water rates?, accountant fees etc.
In general your comments are well put, but in the interests of balance, I think its worth noting that the circa 50% tax hit on rental income applies only to the residual profit element after deduction of allowable costs and capital allowances, and not to the entire income received.
In the current environment, most first-time landlords will struggle to make any sort of decent profit, and as such they shouldn't have much of a tax bill if they organise themselves properly and claim all their deductions etc entitlements.
Now as you can guess I am no expert on this but the way I am guessing I would say that if I get €500 each month (6k annually) I would have to be prepared to be paying €2,500 to €3,000 each yr back to Revenue? Would this be too much do you think? Thats what sort of figure I'm working to, and the reason for the thread in the 1st place. I can't see it as 'making a profit' unless you had a property that was mortgage free.
Rental income €500 per month, €6k annually.
Our tax rate - 41%
My mortgage interest repayments - €375 per quarter, €1125 annually.
So is €845 of that €1125 not included in what I have to pay back? Or it that wrong too?
The main problem is when a tenant stops paying the rent, and the new LL discover's theres no legal way to get a bad tenant out of the house. Basically the law is all on the side of the tenant. When the LL do finally get a bad tenant out, there is no way of getting arrears or damages out of them. So its critical the LL gets a good tenant. A bad one could potentially financially ruin a LL.
You shouldn't need an accountant as it's very simple in your case, you're only adding to your costs, unless you feel you can't manage it yourself. Those fees are in any case deductable.
Greta
By the way, I know a few people who rent out houses for cash, and Revenue know nowt about this. This would be lucrative,
6000 rent less
200 NPPR
QUOTE]
Bronte, The NPPR €200 is not deductable against rental income.
OP, Is your husband/wife working? If a spouse is not working(or has a low salary), the lease is in his/her name then he/she pays tax on rental profit at the lower rate of 21%(or whatever it is) rather than 41%.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?