Mortgage or no mortgage for rental?

C

Cowpat

Registered User
Messages
50
Assuming a house is rented for €1000 p/m by a landlord who is on the higher tax rate. An inheritance allows landlord to pay off the mortgage in full. Is it more tax efficient to continue with the mortgage at an interest rate of 3.7% on €170K, or pay the mortgage off completely?
 
Pay off the mortgage completely. You can only write off 75% of the interest but even if you could use 100% you would still be paying 1.85% in interest gross. Only reason for not paying it off may be that they would like to have ready cash handy or want to use the cash for further investment which would yield a higher return.
 
Thanks for reply elcato. Does it make sense for someone aged 50-54 to pay 30% into work AVC scheme to offset rental liability?
 
You must log in or register to reply here.
Back
Top