Key Post: Rental income in Ireland while living abroad

[Brendan Burgess]

I will be moving over to scotland to work in 8 weeks time where i will be paying taxs.I'm currently living in my own house in Dublin which i intend to let out.After paying expences ie. mortgage and up keep of house i hope to have 5000 euro per year in hand of which i guess 3000 will be taxable.How will i be taxed?Do i have any tax allowances?
Many thanks John....

 

[Tommy]

Re: Rental income

Hi John

Any rental income you earn from your house will be taxed in Ireland, even while you are living abroad.

You can work out your probable tax liability by reading through the [broken link removed] or by looking at the (simpler)Guide to Tax on Rental Income on my own website.

Whether you can use your Irish tax credits against tax on your rental income depends on how long you remain classed as "Irish-resident" for tax purposes. I would guess that this will only really apply for the tax year 2002.

We discussed this in more detail on some time ago.

As a non-resident landlord, you will be affected by special rules which the Revenue introduced some years ago to deal with this area. Basically, you are obliged to appoint someone resident here to act as "collection agent" for your rental income. (The collection agent may be a relative, a friend or a property management company). They are responsible for deducting standard-rate income tax (@20%) from the rents collected and paying same over to the Revenue on your behalf. It is then up to you to make your annual rental income tax return in order to obtain credit for deductions, allowances and tax credits against this income.

You may also wish to hire an accountant (such as myself) to prepare the returns for you. This was discussed recently on .

Hope this helps,

If you have any queries, please ask.

Tommy
www.mcgibney.com

 

[rainyday]

Re: Rental income

Hi John

After paying expences ie. mortgage and up keep of house

Please note that mortgage payments are not a deductible expense when calculating your tax liability. Mortgage interest payments are deductible. If your mortgage is relatively recent, there probably won't be a lot of difference as your monthly payments are almost entirely interest. If it's an old mortgage, the difference may be substantial.


(typo removed - Tommy)

 

[N0elC]

Stamp Duty implications

One other very big factor to consider is the Stamp Duty implication of renting your home out.

If you rent out your home within 5 years of purchasing it, you will be liable to pay Stamp Duty on the value of the property at the point of renting (i.e., not at the purchase price), and at the investor rate of CGT prevailing at that time. This Stamp Duty charge could substantially outweigh any rents you might receive.

 

[N0elC]

Stamp Duty implications

The Stamp Duty implications are discussed in more detail