Letting in Ireland while living in States

Hello
I am emmigrating to the States in 6 months time.

I have a home in Ireland and am trying to sell it. So far I have not had much interest so I’m considering letting it.

The rent would not cover the mortgage repayments and I’ll have to pay approx. €100 a month myself to cover the difference.

My questions are:
Will I have to pay any tax on the rent as I am not making any profit?
Can I claim any expenses, management fees, repairs etc back eventhough I will not have an income in Ireland?

Any advice would be greatly appreciated
Thank you

Re: Renting in Ireland while living in States

If you are a non-Irish resident landlord, your tenants are obliged to withhold standard rate tax from rental income, unless you have an authorised agent acting on your behalf.

This agent can be a family member or friend who registers as your Agent with the Revenue.

You need to register with the PRTB in order to be able to claim tax relief for mortgage interest paid against your rental income.

Your taxable rental profit will be calcuated by taking your gross rental income and deducting:

Mortgage interest paid (not capital repayments)
Management Fees
Repairs
Any other tax deductable expenditure.
If you rent your property furnished you may also claim wear & tear of 12.5% for 8 years on the value of the furniture at the date of commencement of letting, and any further such purchases.

You will need to make a tax return each year to show this.

Re: Renting in Ireland while living in States

If your not even covering the rent why don't you just drop the selling price until it sells?

Re: Renting in Ireland while living in States

Thank you Domo. Thats very helpful.

Mr DT - I'm happy to have to send over €100 a month instead of dropping to a price that sells just for the sake of selling. I've invested alot into the house and am not willing to give it away. However the price is negotiable to a point . I've seen a number of houses slashing their prices and are still not getting any buyers. The problem is people are afraid to buy because they feel they will be in an negative equity position straight away so they are holding out until it levels off and secondly its not as easy for people to get mortgages as it once was.
When I'm settled in the states I plan on forwarding a lump some over to bring the balance of the mortgage to a level which is in line with the rent received.

Re: Renting in Ireland while living in States

due to last budget you will have to pay 1% of income (rent) at a minimum.

PRTB fee is €70

You wil lneed a BER certificate if renting after Jan 1 and that will cost about €500.

You may be liable for the €200 second home tax introdced in last budget. I say may. it needs some clarification.

Re: Renting in Ireland while living in States

JMW you really need to do the sums on the rental, you should only calculate it at about 10 months rent. There is a lot more to renting than you might think. Look at the many threads on AAM on this subject to get some idea of what you are getting into. This is particularly as you will be very far away, it is not as simple as just handing the property to an agent and the money will flow in. It may be better for you financially and psychologically to offload it now even if you make little or no profit.

Re: Renting in Ireland while living in States

Hi Bronte,
I've looked through most of the threads and the following are the costs that I will probably incur
-BER cost €300 - 500 ( 1 off cost for 10 years)
-Estate management Fee - €300 (Yearly)
-PRTB €70
-Extra €100 for 1 month to cover mortgage (This is helping to lower the mortgage balance)
-Agent fee??? ( If decide to go with )
-Accountant
-Repairs (House is in good shape but would set aside €1000 a year )
-Possibility of having no renters for some time. (Which is covered in Savings for 3 months)

Much off the above can be written off.
Are there others that come to mind. The house was recently valued at over 70K more than we bought it for. Surely if I can carry the costs it makes sense to keep it.

Re: Renting in Ireland while living in States

Is the €100 you refer to just the difference between total monthly mortgage payment and rent? If so, you also have to take into account tax, which is payable at your highest rate on the total rent after deductions. For example, if you had no other offsettable expenses and your mortgage payment is €1300 per month, consisting of €800 capital payment and €500 interest payment and the rent you receive is €1200 per month, then the cost to you is 41% of €700 (tax on rent-mortgage interest) + €100 (overall mortgage vs rent shortfall).

Sprite