Rental income tax in ireland

[derekm]

Hi All,

I have a query regarding expenses that can be offset against rental income tax.
Can I offset mortgage interest off the gross income from rent of a property? If so does it matter if the property has been remortgaged before it has been rented out?
Also, does it matter in this case if the property was an owner/ occupier property before it was rented or bought as an investment property?
Hope this is clear. Thanks for your help.
Derek

 

[Helen]

Hi Derek,

This post should answer the first part of your question.
http://www.askaboutmoney.com/showthread.php?p=169044#post169044

On the second part, it doesn't matter if the property was a PPR before renting it out.

Helen

 

[asdfg]

Can I offset mortgage interest off the gross income from rent of a property?

Yes

If so does it matter if the property has been remortgaged before it has been rented out?

Not sure about this point.

does it matter in this case if the property was an owner/ occupier property before it was rented

I'm assuming you own the property.
There may be stamp duty issues. i.e. you will have to pay the difference between the stamp duty for an owner occupier and investor. If you bought as a first time buyer within the last 5 years you will have to pay the full stamp duty investor rate.
There are also CGT issues on selling the property.

or bought as an investment property?

If you bought the property as an investment and assuming you paid stamp duty at the investors rate, then this will not be an issue for you.

It could however be a problem for the seller of the property if the were FTB and selling within 5 years of occupation. They may have to pay back the difference in the stamp duty.


Post crossed with Helen's

 

[ClubMan]

Can I offset mortgage interest off the gross income from rent of a property? If so does it matter if the property has been remortgaged before it has been rented out?

Not sure what you mean here either but perhaps you are referring to the details of what interest on what loans you can offset against rental income? If this is the question then interest on loans used to buy or renovate the property can be set against rental income. If you remortgaged the property and used the money for some other purpose than this then you cannot write the interest off against rental income. If you already owned the property or only had a small mortgage on it then interest on any additional borrowings from a remortgage/top-up cannot be set against rental income - just interest on the outstanding amount used to purchase it. Does that address your question?

 

[derekm]

'If you already owned the property or only had a small mortgage on it then interest on any additional borrowings from a remortgage/top-up cannot be set against rental income - just interest on the outstanding amount used to purchase it. Does that address your question?'

Thanks ClubMan, that's what I was worried about. I was hoping to remortgage (to the max) my apartment which has presently only a small mortgage and turn it into a interest only mortgage and use the extra cash to buy another property, while renting out the apartment. As my mortgage is quite low for the apartment, the interest that I can offset against the rental income would be low. So it seems that I will end up paying high amounts of tax. It may be better to sell the apartment...