Paying Rental Tax On An Irish Investment Property?

Hi guys,

Need your help on this one!..Myself and my girlfriend have just bought a 2 bed apt in Dublin. This is an investment property and therefore we WILL be going through the books and paying stamp duty of 7.5%. A very good friend of mine said better to pay it now, than get caught and pay more later!

This however is not the problem!..We will be moving to the UK this year (4yrs + ) and we are hoping to rent out the property. With regards to paying income tax on the rent each month/each year how do I pay it and at what percentage is it at if I am no longer a resident of Ireland????

Any help at all guys would be really appreciated!

Thanks ever so much,

Carlb

It's all here (see www.revenue.ie)

<H5>What if Rents are payable to a non-resident landlord?

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If a landlord resides outside the country and rent is paid directly to him/her or to his/her bank account either in the State or abroad, tax must be deducted by the tenant at the standard rate of tax (currently 20%) from the gross rents payable. Failure to deduct tax leaves the tenant liable for the tax that should have been deducted.


Example: Gross rent per mnth€ 1,000Deduct tax (1000 x 20%) € 200Pay to Landlord (1,000-200) € 800
The tenant must also give a Form R185* to the landlord to show that the tax has been accounted for to Revenue.

Where an agent, resident in the State, is appointed by the non-resident landlord to manage the property and the agent is collecting the rents, the rents must be paid gross to the agent. The agent is then chargeable to tax on the rents as Collection Agent for the landlord and is required to submit an annual tax return and account for the tax due under Self Assessment. Leaflet IT10 Guide to Self Assessment* provides more detailed information.

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Note: The agent appointed need not be a professional person, i.e., it can be a family member or other person prepared to take on the responsibility and undertakes to make annual tax returns and account to Revenue for the tax due.

* (Also available from Revenue’s Forms and Leaflets Service at LoCall 1890 30 67 06 or your local Revenue office).</H5>

Curious to hear thaat you WILL be paying stamp duty. I was under the impression that there was no choice in the matter, that Mr Solicitor had to enforce this. What the he ll do those guys get paid to do exactly?

Howitzer said:

Curious to hear thaat you WILL be paying stamp duty. I was under the impression that there was no choice in the matter, that Mr Solicitor had to enforce this. What the he ll do those guys get paid to do exactly?

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maybe he was under the threshold and a first time buyer and could not have to pay if it was his PPR,im sure theres people buying without stamp duty as first time buyer and subsequently renting it out and living at home,in fact i know several young people doing this.

Strictly, the tenant is meant to deduct the tax portion of the rent and send it to the Revenue. The reason for this is that you might be out of the system and therefore out of contact.

However, send the revenue a email with all your details and request that you fill in a income tax form in the normal way and they will accept your bona fides on this and you don't have to bother the tenants.

Relating to your question on how much tax you will have to pay, this depends on whether you have any other source of income in the state. In my case I had no other income and applied the tax at the lower rate after taking off mort. int relief, allowable depreciation of the furniture, other expenses in letting and applying my personal allowances. This is where it got interesting because my understanding from reading the literature was that you are only entitled to a % of your personal allowances equating to your Irish income / worldwide income. I applied this which meant a tax liability and sent off the cheque. The tax office redid the computation and applied 100% of the allowances and refunded me the tax paid.

Enda Storey