Rental options when Travelling for 12 months

G

Gone fishing

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My spouse and I are taking a year out to go travelling next year. We have 3 properties to consider-
1 - currently rented with long term tenants, earning circa €20k per annum,
2 - recently vacated but most recent rental €18k per annum,
3 - principle primary home which we intend to rent out at circa €60k per annum.

We plan to travel for around 12 months, but this could be slightly shorter or slightly longer. We don’t have a definitive timeline. We will be PAYE workers until we leave the country in Q2.

My question is, should / could we move into the vacant rental (2) and make this our ppr for 12 months and do the ‘rent a room scheme’. This gives us more flexibility if we have to return home early for any reason. It also means we can move in more or less straight away and get our own ppr ready to let. Could be more difficult to find tenants willing to sign up to this arrangement!.

I also know there will be 1 year of cgt to be paid whenever we sell our ppr in the future (not intending on selling)
Is there anything I am not considering?
Are there any benefits to us in being non resident landlords?
Can we write off expenses incurred preparing the ppr property (3) for rent (we need to do some minor repairs before it is fit for letting)?

Thanks!
 
We would move to the rental in jan, use this as our ppr and start the ‘rent a room scheme’ when we leave the country.
 
I would be very, very, very careful about renting out my PPR for a year. If I were you I’d be spending a chunk of that projected 60k on good legal advice to make absolutely sure you can come back and live in it in a years time…

I’m a homeless homeowner’: The apartment owner who is now couch surfing

www.irishtimes.com

‘I’m a homeless homeowner’: The apartment owner who is now couch surfing

Jeanette Brown believes there should be amendment to the Act to allow for situations such as hers
www.irishtimes.com www.irishtimes.com
 
miser said:
I would be very, very, very careful about renting out my PPR for a year. If I were you I’d be spending a chunk of that projected 60k on good legal advice to make absolutely sure you can come back and live in it in a years time…

I’m a homeless homeowner’: The apartment owner who is now couch surfing

www.irishtimes.com

‘I’m a homeless homeowner’: The apartment owner who is now couch surfing

Jeanette Brown believes there should be amendment to the Act to allow for situations such as hers
www.irishtimes.com www.irishtimes.com
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Yes, I understand the risks and that’s why we were hoping to have a more flexible arrangement with the rental (2). We are planning to be very clear up front with the tenants moving into our ppr and will vet them ourselves so there is no ambiguity around the duration of the let. We need to let this property for financial reasons.
 
Gone fishing said:
Yes, I understand the risks and that’s why we were hoping to have a more flexible arrangement with the rental (2). We are planning to be very clear up front with the tenants moving into our ppr and will vet them ourselves so there is no ambiguity around the duration of the let. We need to let this property for financial reasons.
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This doesn't matter. Once the tenants are in place for six months they have a tenancy of unlimited duration that can only be terminated on certain grounds including your need to occupy the house yourself.

For example if you are away for 12 months you need to issue a notice of termination at the very latest and the start of the seventh month so you are in a position to gain vacant possession after 12.

Read more here.

There is huge downside risk here. Either that you get a detail wrong on the notification of termination and it becomes invalid. Or that a tenant overholds and you are back in Ireland with nowhere to live.

In your shoes I would look for an informal caretaker arrangement with a friend or family member for rental 2. They pay all bills, insurance, carry out minor repairs, etc, and you get to return when you want to.
 
gipimann said:
In order to avail of the rent a room scheme tax relief, you must be living in the property.
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I thought that but was hoping if we maybe redirected our post to that address it might be enough.
Is there any other flexible arrangement that we could avail of?

Maybe we could temporarily give it to Ukrainian refugees and get €800 per month. Does anyone know if there is a minimum timeframe with this arrangement? If we were to do this, who pays the utility bills?
 
Gone fishing said:
I also know there will be 1 year of cgt to be paid whenever we sell our ppr in the future (not intending on selling)
Click to expand...
In the scheme of things this is not likely to be material. After 25 years you are exposing 4% of the capital gain to 33% CGT, and there is a personal CGT exemption as well which will eat into this.
Gone fishing said:
Is there anything I am not considering?
Are there any benefits to us in being non resident landlords?
Click to expand...
You might be able to reamin tax resident if you go say mid-May 2023 to mid-June 2024 you would have >280 days residence in Ireland over the two tax years 2023-2024.

Gone fishing said:
Can we write off expenses incurred preparing the ppr property (3) for rent (we need to do some minor repairs before it is fit for letting)?
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In general, no.
 
From memory the only pre-letting expenses you can claim are things like advertising, agents fees & the like.

However repairs carried out when your tenants are in place are claimable.

So rent your property & let your tenants know what works you will carrying out & when.
 
DannyBoyD said:
More like they will demand you pay the tax due!
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Plus interest ....... plus penalties.

On the positive side it give one the opportunity of free publicity through inclusion - free of charge - on the quarterly tax defaulters list!
 
Groucho said:
That's for Part 1 (Court Determinations) - Part 2 (settlements) includes smaller sums.
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I suspect it's the other way round.

It would be very rare for a court to impose a €50k fine on foot of, say, failure to file tax returns.
 
This may Come across as a bit out of left field but...

Take a step back for a moment from your current plans for traveling and returning.

Your PPR is clearly a very valuable property based on your rent projections.

You have 2 other rental properties.
The fact that you're going traveling suggests that you do not have young children.

When you eventually pass on you will be leaving 3 properties to be divided among your beneficiaries. Have you considered how much CAT your beneficiaries will be liable for? Made some projections?

I'd urge you to game this out and if suitable this travel period might just be an opportunity to sell your PPR CGT free, downsize to a smaller house. Lean out your estate, pay down some loans and enjoy the fruits of some of your labor.

Just a thought that youmay/ may not have considered.

Good luck on your travels and shoot for longer rather than shorter if you can.
 
NoRegretsCoyote said:
This doesn't matter. Once the tenants are in place for six months they have a tenancy of unlimited duration that can only be terminated on certain grounds including your need to occupy the house yourself.

For example if you are away for 12 months you need to issue a notice of termination at the very latest and the start of the seventh month so you are in a position to gain vacant possession after 12.

Read more here.

There is huge downside risk here. Either that you get a detail wrong on the notification of termination and it becomes invalid. Or that a tenant overholds and you are back in Ireland with nowhere to live.

In your shoes I would look for an informal caretaker arrangement with a friend or family member for rental 2. They pay all bills, insurance, carry out minor repairs, etc, and you get to return when you want to.
Click to expand...
Thanks, so maybe we should just do a 6 month let, return home for Christmas (which we were intending to do anyway) and do another 6 month let. There seems to be demand in the area for people needing temporary accommodation while renovating their homes.
Horatio said:
This may Come across as a bit out of left field but...

Take a step back for a moment from your current plans for traveling and returning.

Your PPR is clearly a very valuable property based on your rent projections.

You have 2 other rental properties.
The fact that you're going traveling suggests that you do not have young children.

When you eventually pass on you will be leaving 3 properties to be divided among your beneficiaries. Have you considered how much CAT your beneficiaries will be liable for? Made some projections?

I'd urge you to game this out and if suitable this travel period might just be an opportunity to sell your PPR CGT free, downsize to a smaller house. Lean out your estate, pay down some loans and enjoy the fruits of some of your labor.

Just a thought that youmay/ may not have considered.

Good luck on your travels and shoot for longer rather than shorter if you can.
Click to expand...
thanks for your comment. I think this is what we will ultimately do but for now we plan on returning and going back to work as we still have a significant mortgage our on ppr.
Once that is cleared, we will potentially retire early and downsize. We don’t want to push out our travel plans to retirement as we would prefer to do this when young, fit & healthy
 
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