mrso'brien
Registered User
- Messages
- 35
Bronte, The NPPR €200 is not deductable against rental income.
P.S. Revenue told me that if you are PAYE you can just send the form back with your P60 to them instead of registering yourself as self-employed if you are renting out a house.
. You have saved me a lot of hassle and confusion with that list. I hadn't a clue about the deductions/reliefs.
.
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%.
Unfortunately, we both earn enough to have to pay 41%.
6000 rent less
845 75% interest
90 PRTB
Rates/water
Depreciation 12.5 %
Advertising
Gardening
Repairs
house insurance
life insurance (as long as it's term insurance)
The NPPR is not allowable, but we are all hoping revenue will change their minds on this the same as they did (after many years) for the life insurance
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.
One question, your rent is only 115 a week. Is it a one bed appartment?
2) Paying this 41%.
- I have it in my head that because we as a couple are in the 41% tax band, that the entire rental income, of say €6000, is subject to tax at 41%. Is this true? I read that its 41% of the profit, not the rental income? Could someone give a simple guide as to what the 41% is of, because I have it in my head that we have to pay 41% on the €6k (minus expenses of course). Perhaps I'm wrong.
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.
But surely its not profit that you are taxed on, but your income you receive from renting.
I understand that I can take off deductions but I will still end up with maybe €3.5k - €4k out of €6k that I will be liable to be taxed on, so surely to say I won't have much of a tax bill is slightly generous.
1) Pre-letting expenses not allowed?
- If true, does this mean that if I buy stuff now for the house to furnish it or provide white goods, or paint it, can I not claim for this? .
Sorry, and I don't really know how to say this, but why is it not logical to assume that you would be taxed on your profit?
In general terms, businesses are taxed on their profits, not their turnover.
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