Renting out a house, repairing it, and tax

redleprechaun

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Hello,

I am considering (as one possibility) renting out a house. But it needs some cosmetic repairs (mostly decorating) to get good rental value. I though I'd be able to offset this against rental income tax.

But I now read the Revenue website and see that expenses prior to renting out are not allowable - while maintenance, including decorating, when the house is rented out is allowable. Expenses between lettings are allowable "in certain circumstances" and I could not find any information about these circumstances.

So is there some way to make these decorations on an allowable basis?

Also "capital expenses on property improvement" are not allowable, but where is the border between "maintenance/decoration" and "property improvement"? For example, is tiling a floor "maintenance" or "improvement"? How about fitting a new lighting fixture?
 
You rent the house for a short period, then when your tenants leave you redecorate.
 
I did consider this option, but the house is in a rent pressure zone. And without redecoration the rent would be rather low. Then after re-decorating I would not be able to raise it for new tenants as I'd be stuck in the RPZ formula.
 
Hello,

I am considering (as one possibility) renting out a house. But it needs some cosmetic repairs (mostly decorating) to get good rental value. I though I'd be able to offset this against rental income tax.

Unfortunately not.

So is there some way to make these decorations on an allowable basis?

If you’re an amateur landlord I don’t think there’s any way of benefitting of tax incentives. (I would imagine a professional landlord has the wherewithal to take advantage.)

Also "capital expenses on property improvement" are not allowable, but where is the border between "maintenance/decoration" and "property improvement"? For example, is tiling a floor "maintenance" or "improvement"? How about fitting a new lighting fixture?

I remember a ballpark figure of 5% of the property value being thrown about when this was introduced.
Another rule-of-thumb was that if you could do it yourself, then it probably wasn’t a “property improvement”.

For example, is tiling a floor "maintenance" or "improvement"?
How long is a piece of string?


How about fitting a new lighting fixture?

Definitely not.
 
Also worth considering, there have been rent freezes on-and-off for the last 11 months.
I’ve a rental property with HAP tenants. I applied to increase the rent between Lockdown 1 and Lockdown 2, setting the increase date as January 2021.
I’ve heard nothing back from the HAP people and the rent hasn’t increased.

I’ll try again when the pandemic is officially over.
 
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