Jobseekers Allowance and Rental Property ( means test ).

senni

Frequent Poster
Messages
172
Hi

If you have a rental property worth 150,000 and the mortgage outstanding on it is 200,000 and the rental income , minus the life ins, taxes, and expenses doesnt cover the full capital and repayment on the mortgage but may cover the interest only part , will the rental income still be assessed for Jobseekers ? even though technicaly no income is recd from it as the expenses outstrip the income . ( on tax return )

Jobseeker was previously assessed under a capital value before and not rental income value but social have now asked for income details.

Looking to educate myself in this area as i work in it

Thank You
 

Protocol

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2,872
Please note that when calculating rental profits, only mortgage interest is deducted, not the capital repayment.

The capital repayment is obviously not an expense.
 

senni

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Messages
172
Please note that when calculating rental profits, only mortgage interest is deducted, not the capital repayment.

The capital repayment is obviously not an expense.

Thank You , yes i understand mortgage interest is deducted but i was aksed do social welfare negate other expenses , life ins, house insurance , painting and upkeep of the property. These affect the true income recd , which they say is nil after all these expenses ?
 

blured

Registered User
Messages
42
Cashflow may be nil - but there could still be profit. For Example

Rent 1000 per month
Mortgage 800 p/m (400 interest and 400 capital)
Other Allowable Expenses 200 p/m
So - zero cash flow, but rental profit of 400 p/m (Rent minus Interest and Other Allowable Expenses)

Tax would be due on the 400p/m
 

senni

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172
Im proberly not explaining it correctly . Its not in relation to revenue but in relation to Job Seekers Allowance with social welfare .

I understand that they only look at the mortgage interest as an expense and not the capital part of the repayment. What i'd like to learn is , do social welfare also look at Life Cover , House Insurance Cover , bills used to upkeep the property as an expense too ?

Examples, which one do social welfare look at when assessing for jobseekers allowance ?


1) Rent 600pm ( minus mortgage interest 300 )so rental income is 300. So 300 is assessed

or

2) Rent 600pm ( minus mortgage interest 300, minus life and house ins 50, minus painting 50, Accountancy fee 50, Agency fee 50, etc ) leaving 100 as a true reflection of rental income ? so 100 is assessed ?

suppose im asking what do social welfare accept as an allowabale expense re rental income ?
 

gipimann

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4,723
Here are the guidelines for means testing for Jobseeker (and other ) payments.

http://www.welfare.ie/en/Pages/Means-Assessment.aspx

See the sections "Assessment of second properties" and "Property personally used or enjoyed"

The first section states that second properties are assessed on the capital value, not the income.
The second section refers to situations where a property is part-let and part used by the owner. In that case, rental income is assessed, and the only allowable deductions are mortgage interest and ground rent.
 

senni

Frequent Poster
Messages
172
Here are the guidelines for means testing for Jobseeker (and other ) payments.

http://www.welfare.ie/en/Pages/Means-Assessment.aspx

See the sections "Assessment of second properties" and "Property personally used or enjoyed"

The first section states that second properties are assessed on the capital value, not the income.
The second section refers to situations where a property is part-let and part used by the owner. In that case, rental income is assessed, and the only allowable deductions are mortgage interest and ground rent.

Thank you
 
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