Renovation costs between tenancies

D

DannyBoyD

Registered User
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1,668
Teasing out a possible strategy for a property which will shortly become vacant (tenant relocating).

Its time for it to have a decent overhaul; bathroom, kitchen & the like.

I'm considering doing the renovations over a longer period of time & possibly not reletting until the 2 year period is up so that I can then relet at market rent.

Difference between current rent & market rent (with renovation) is double; so waiting to get back to market rent is not as mad as it might sound.

Here's my question - are my renovation costs carried forward for tax relief?

For example (invented figures)
YearRentReno
20235k (part year)10k
2024015k
202515k (part year)0
202630k0

Can I carry forward my 25k reno costs into 2025 /2026?
 
Hi Danny

I don't know the answer to your question, but this came up in another thread,

Could you rent it to Ukrainians for the two years? You get paid for it by the government and it counts as empty for the purposes of rent controls.

Brendan
 
Brendan Burgess said:
Hi Danny

I don't know the answer to your question, but this came up in another thread,

Could you rent it to Ukrainians for the two years? You get paid for it by the government and it counts as empty for the purposes of rent controls.

Brendan
Click to expand...
Excellent idea. I'm surprised more landlords aren't doing this.
 
Brendan Burgess said:
Hi Danny

I don't know the answer to your question, but this came up in another thread,

Could you rent it to Ukrainians for the two years? You get paid for it by the government and it counts as empty for the purposes of rent controls.

Brendan
Click to expand...
Its worth consideration; if I do renovations though I'd want it to be fresh before reletting long term.
 
Is it absolutely established that by renting to Ukranians for a period would not qualify as a tenancy and allow return to full market rent after a 2 year period?
 
Will def think about it; it's not quite up to modern standards though.

Still need to see about the reno costs in following years.

Its not just white goods so the 'claim back over 8 years' won't apply I think.
 
Knuttell said:
Is it absolutely established that by renting to Ukranians for a period would not qualify as a tenancy and allow return to full market rent after a 2 year period?
Click to expand...
Ukrainian rentals arent registered w prtb and don't acquire tenancy rights.

From memory, the RTB exemption form has you declare the property is not subject to a registered tenancy for two years.

And somewhat digressing.

But there is a supreme irony in Govt recognising the barriers to property owners in letting out their properties to refugees by making the payments tax free, removing the RTB requirements and also the acquiring of indefinate tenancy rights.

Pity they couldn't do that for the 7000 tenants (RTB numbers) under notice to quit & keep property owners in the business.
 
Last edited:
DannyBoyD said:
Teasing out a possible strategy for a property which will shortly become vacant (tenant relocating).

Its time for it to have a decent overhaul; bathroom, kitchen & the like.

I'm considering doing the renovations over a longer period of time & possibly not reletting until the 2 year period is up so that I can then relet at market rent.

Difference between current rent & market rent (with renovation) is double; so waiting to get back to market rent is not as mad as it might sound.

Here's my question - are my renovation costs carried forward for tax relief?

For example (invented figures)
YearRentReno
20235k (part year)10k
2024015k
202515k (part year)0
202630k0

Can I carry forward my 25k reno costs into 2025 /2026?
Click to expand...

3.3 What properties are exempt in Rent Pressure Zone areas? Some properties are exempt from the 4% rent restriction in Rent Pressure Zone areas. Exemptions are available in two circumstances:

(i) properties new to the rental market or those that have not been let in the previous two years;

and (ii) properties which have undergone a substantial change in the nature of accommodation that affects the letting value.

Instead of writing off 2 years rent, do a more substantial renovation....
 
DannyBoyD said:
Here's my question - are my renovation costs carried forward for tax relief?
Click to expand...
If I understand this Revenue guidance correctly the answer seems to be yes and no.

You can make up to €10k of tax-deductible renovation expenditure on a property vacant for a minimum of six months. For tax purposes it's treated as if it took place on the first day of the tenancy.

The issue is that the property needs to be re-let by 31 December 2024 which is too soon for you as it would be inside the 24-month RTB limit for setting a new rent. This could well be extended in the budget but you'd be taking your chances.
 
Brendan Burgess said:
Could you rent it to Ukrainians for the two years? You get paid for it by the government and it counts as empty for the purposes of rent controls.
Click to expand...
Red Cross registration site is down.

Ukrainian payment ends in March 2024; they extended it this year for 12 months. I wouldn't be sure there's an appetite to extend again.
 
PaddyBloggit said:
If this report is accurate, there won't:

https://www.irishexaminer.com/news/arid-41112766.html
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I wouldn't take that from the report at all. According to the figures in the Examiner, the State is paying €30m per week to hotels, institutions and the like. That's about €4-500 per head per week or about €1800 per month.
In contrast, the €800 per month per property (not per person) paid taxfree to a private property owner under the Accommodation Recognition Payment is an absolute bargain.
 
Hi elcato

Property investment is inherently risky.

If he does it up now and leaves it empty as is his current plan, the rules could change and leaving a property empty for two years might not allow him increase the rent anyway.

If he gives it to Ukrainians after he does it up, he might need to refresh it again after they leave.

If he gives it to Ukrainians now, or at any time, he might not be able to get them out.

Brendan
 
Brendan Burgess said:
.

If he gives it to Ukrainians now, or at any time, he might not be able to get them out.
Click to expand...
Why not? They are not tenants and the conditions of the €800 payment explicitly provide that a rental agreement must not be in place to qualify for the payment. As such, they are bare licensees and have no right to remain. The Residential Tenancies Act isn't engaged and they can be required to vacate at will by the owner. Obviously, the decent thing would be to give reasonable notice but, strictly speaking, this isn't required.
 
Hi Right Winger

I agree with you.

But I am trying to identify what might go wrong?

Any tenant can refuse to move and it's hard to get them out.

Brendan
 
Hello Brendan,

Point is they're not tenants. They're invitees or licensees, just like temporary guests in your property. It's just like if you invite a friend over to stay a few nights. If he refuses to leave you can throw him out! You don't have to get a court order, bailiffs and all that lark.
 
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