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I don't know if this has already been discussed in length, however I'd like clarification. I am in the process of closing on a house. I will be looking to rent out two rooms in the house to cover mortgage payments etc. However these rents totalled will go over the rent a room allowance of 7620.
Can I claim expenses on the 'profit'? Or how is it defined as a profit/loss on rental. Can things like, maintenance fee, utilities, insurance etc be claimed?
Sorry, would just like to get it right before getting any tenants!
What sort of "broker"? If not an authorised advisor, multi-agency intermediary, accountant or general tax advisor then you might not be getting independent, professional advice.I'll speak to my broker etc.
If you are happy to settle that it is an investment property with all the issues raised by previous posters and if your interest is more than your income then you have no tax liability. Note well that only the interest portion of the mortgage is considered not the total mortgage payment,
The leglisation would appear to not allow deduction for expenses, as follows...
"relevant sums" means all sums arising in respect of the use for the purposes of residential accommodation, of a room or rooms in a qualifying residence and includes sums arising in respect of meals, cleaning, laundry and other similar goods and services which are incidentally supplied in connection with that use;
In ascertaining the amount of relevant sums for the purposes of this subsection no deduction shall be made in respect of expenses or any other matter.
Once you breach the rent a room limit then you are assessable for income tax on the lot (not just the excess over the limit), you are basically a landlord, must register with the PRTB, and your property becomes an investment property which may mean has tax (e.g. stamp duty clawback and CGT) implications. If at all possible stay under the €7,620 limit unless you are prepared for all the implications of being a landlord as summarised below:
Rental Income is subject to tax, however if you rent a room in your PPR whilst you still live there you can earn up to €7260 per year without being subject to tax. This limit as previously stated is the maximum. See [broken link removed]. You cannot claim the exemption under this rule if your income exceeds this limit. The PRTB is correct in so far as you are choosing to rent a room under the revenue guidelines only.
Are you sure about that? Even if you are not availing of the rent a room scheme by virtue of receiving more than €7,620 p.a. in rental income?You don't have to register with PRTB if you're renting a room in your house, no matter what you're charging.
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