Owner Occupier to Landlord

J

jimmy2

Guest
Hi, theres probably a few threads on how to go about this i just can't seem to find them....

Ive been an owner occupier for the last four years and now have to move town so want to rent my house out. How do i go about registering as a landlord, filing with the PRTB and will this mean that even though i will be renting in this other town that i have to pay Corporation tax when i eventually sell my property even if i don't purchase a second property....also if i earn over 10,000 euro rent a year how is the rental tax that i have to pay calculated (i plan on getting about 12,000 a year rental income)


Thanks
 
Welcome to the world of the reluctant landlord!

Yes you'll have to register with prtb once you get a tenant.
The www.revenue.ie site has a great guide to rental income.
You'll have to notify your bank of the rental...they will stop tax relief at source....but you can actually claim more relief with a rented property than a residence...but its retrospective.

You will have to notify your house insurance also that it will be rented.
I got a good quote on www.123.ie my own providers tried to fleece me.

You will need a lease document.

Its not rocket science and generally the rules of common sense apply.

Good luck
 
jimmy2 said:
Hi, theres probably a few threads on how to go about this i just can't seem to find them....

Ive been an owner occupier for the last four years and now have to move town so want to rent my house out. How do i go about registering as a landlord, filing with the PRTB and will this mean that even though i will be renting in this other town that i have to pay Corporation tax when i eventually sell my property even if i don't purchase a second property....also if i earn over 10,000 euro rent a year how is the rental tax that i have to pay calculated (i plan on getting about 12,000 a year rental income)


Thanks
Click to expand...
Not being pedantic, just clarifying a few terms so you can do more relevant searches.

You'll become liable for Captial Gains Tax (CGT), not Corporation tax.

The figure of 10,000 has no bearing to you. It is a value that is only applicable to owner occupiers renting a room(s) under the Rent A Room Scheme. You are liable for income tax at your marginal rate for all your rental income minus allowable expenses (inc 75% of your mortgage interest, if and only if, you've registered with the PRTB).
 
Thanks, just to get it clear so if i change from an owner occupier to landlord even though i only have one property is there anyway i can eventually change back to owner occupier before i sell my house and avoid the capital gains tax or is that impossible
 
In my experience both as landlord and tenant...agents are not worth paying one months rent to...not at all.

I live abroad and have family and neighbours looking after my property.
I pay the neighbour less than I would pay the agent and I have managed most of the re-lets from abroad...ie put up the ad on daft communicated with prospective tenants etc. The locals arranged the tidy up and viewings for me.(I paid them for this)
Re CGT I *think* that you have 1 years where it doesn't affect you if you move back in.

after that you pay CGT on the gain from when you left it. So you would pay CGT on the gain between 2009 and when you sell it in say 2012...not on the gain since you owned the house.

I was looking at selling a property that was out PPR in 2005....its actually lost value so there would be no CGT liability . Not an expert so need to confirm.
 
Mommah said:
after that you pay CGT on the gain from when you left it. So you would pay CGT on the gain between 2009 and when you sell it in say 2012...not on the gain since you owned the house.

I was looking at selling a property that was out PPR in 2005....its actually lost value so there would be no CGT liability . Not an expert so need to confirm.
Click to expand...

I don't believe you're correct there. According to Revenue's site,
"an apportionment is made to arrive at the exempt portion of the total gain." As I understand it, this means if you own it for 7 years, and live there for 4, then 4+1 / 7 of the gain is exempt. (the +1 comming from the 1 year exemption you mentioned.)

So it is possible to have a chargable gain, even if the house loses value after the switch.
Eg, house bought for 200,000, worth 500,000 4 years later when switch happens. Sell 3 years later for 340,000.
Gain is 140,000, exempt portion is 5/7 = 100,000, taxable is 40,000

As no transaction takes place when it is switched to a rental, the value then is not relevant.

(Disclaimer: Also not an expert :) )
 
Berni said:
As no transaction takes place when it is switched to a rental, the value then is not relevant.

(Disclaimer: Also not an expert :) )
Click to expand...

You're dead right Berni. The value at the date of change from PPR to investment property is irrelevant. The relevant prices are the buy price and the sell price (with the relevant apportionments of profit based on PPR vs Investment and deductions for expenses)
 
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