Announcement Landlords can deduct 100% of interest paid for tax purposes

Discussion in 'Budget 2019' started by Brendan Burgess, Oct 9, 2018 at 1:26 PM.

  1. Brendan Burgess

    Brendan Burgess Founder

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    Last edited: Oct 9, 2018 at 2:02 PM
    Full restoration of interest rate reduction for landlords from 1 Jan 2019
     
    Last edited: Oct 9, 2018 at 2:02 PM
  2. Bronte

    Bronte Frequent Poster

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    What does this mean?
     
  3. Brendan Burgess

    Brendan Burgess Founder

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    It means I can't type quick enough.

    Corrected now.

    Brendan
     
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  4. Bronte

    Bronte Frequent Poster

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    Anything else for landlords? Anything to encourage us to renovate? Or purchase and renovate? I was hoping with the granny grant there might be a move on this.
     
  5. Firefly

    Firefly Frequent Poster

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    Aren't ye rich enough? :p
     
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  6. Setanta12

    Setanta12 Frequent Poster

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    Many weeks between announcement of Budget and passing of the Bill in the Dail. I think though the granny-grant was aimed at owner-occupiers .. ..
     
  7. Sarenco

    Sarenco Frequent Poster

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    This change would be worth around €400 to a landlord with a €4,000 interest bill.

    Enough to keep him in the property rental game? Maybe.
     
  8. T McGibney

    T McGibney Frequent Poster

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    I think its long term effect will be to remove one obstacle to new investors entering the market. These are essential if housebuilders are going to be in a position to deliver a decent volumes of new builds in the coming years.
     
  9. TheBigShort

    TheBigShort Frequent Poster

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    Personally I think it is a redundant idea. The issue is a lack of supply, not a lack of LL's. Landlords dont build houses, they compete with prospective owner occupiers for available properties, pushing up house prices, turning prospective buyers into tenants.
     
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  10. PaxmanK

    PaxmanK Frequent Poster

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    Not a chance of that weak effort getting landlords to stay.
    And as for new entrants ... Not a chance either.
    They know now that the goalposts can move at a whim and that they never favour the landlord. And if they do it will be a BS move not worth a damn like this one.
    Property investment is too risky. Both the risk of sudden change to legislation and the risk of non paying tenants.
    Anyone wanting in is just nuts.
     
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  11. Gordon Gekko

    Gordon Gekko Frequent Poster

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    I’m not convinced that it’s that weak an effort.

    For a new entrant who’s looking to borrow, rates are very high. Too often, people look through the prism of an existing landlord with a tracker.

    I see full deductibility and think that when the bank tells me that I can borrow at 4.5%, it’s really 2.25% which is more than palatable.
     
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  12. jaykayphd

    jaykayphd Frequent Poster

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    This may be a stupid question. Does this mean that when filing a tax return next year for 2018 accounts one can allow 100% of interest or the 2019 interest is 100% deductible in 2020?
     
  13. Gordon Gekko

    Gordon Gekko Frequent Poster

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    No, for 2019 (submitted in 2020), you can deduct 100% (subject to meeting the other conditions).
     
  14. jpd

    jpd Frequent Poster

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    Not that that will make a difference to the overall housing situation - +1 for owner occupier, -1 for rental properties

    Unless it encourages more people to invest in buying new homes for renting out, I suppose
     
  15. cliqueentour

    cliqueentour Registered User

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    I think it'll actually mean just 200 euro to the landlord.

    It was meant to be 90% in 2019 but its 100% now. So interest of €4000 was to have 90% relief, that is €3600. Tax at say 50%, means tax bill of €1800.

    Now, interest of €4000 has 100% relief, that is €4000. Tax at say 50%, means €400 more in deductible expenses resulting in €200 more for landlord.

    People are making out like this is huge for landlords, its still fairly poor. What about LPT allowed as an expense? Reduce the tax on rental income???
     
  16. Sarenco

    Sarenco Frequent Poster

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    Exactly.
     
  17. Sarenco

    Sarenco Frequent Poster

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    Yeah, I was comparing the position for 2018 with the announced position for 2019 (I wasn’t comparing the announced position with the “what was meant to be” position).

    I agree that this wasn’t a radical change and it seems nuts to me that LPT is not a deductible but expense. However, I do think this change will nudge the dial in favour of staying in the rental game for some l’lords.
     
  18. cliqueentour

    cliqueentour Registered User

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    Making rental income liable for prsi and USC meant landlords were required to increase rent by 21.7% just to maintain after tax income.

    If the government removes this then as a landlord I will gladly reduced my rent by 21.7%. Have we a deal???
     
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  19. PaxmanK

    PaxmanK Frequent Poster

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    There are a lot more serious issues to prevent someone wanting to become a landlord than the tax relief in interest. I think there is not a chance that this measure has made letting more attractive. It's just looking service and not worth a damn.

    If they did something significant to keep those in who are leaving them they might make a duffreence. It's just too fluid the last few years. Legislation changing with the wind. Nobody wants to put up with that kind of environment
     
  20. Bronte

    Bronte Frequent Poster

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    You can never be too rich or too thin.

    I'm willing to house 4 extra people right now if the government had actually done something practical. This 100% is a nonsense and won't incentivise anybody, not with the tax rates and the USC, and with all the horror stories at the PRTB.

    I await the granny flat grant news to see if there is anything there to encourage landlords. Meanwhile I contacted an auctioneer two weeks ago about selling and spoke to my tenant of 7 years and told him I'm thinking of getting out.
     
    Firefly likes this.