Renting out first house and travelling

Hi. I am going to rent out my first house. As I will be travelling for a year or more, I wont be living in it. The rent will be €600 a month which will keep me out of the investment property bracket and still in the rent a room scheme bracket.

How will revenue look on me not living in the house and renting it to someone?
Will I be liable for stamp duty. It is a small house and only has two bedrooms.

Thanks.

oxygen said:

How will revenue look on me not living in the house and renting it to someone?
Will I be liable for stamp duty. It is a small house and only has two bedrooms.

Click to expand...

I suspect that since it's not going to be your PPR you will be liable for stamp duty clawback and will not be able to rent it out as part of the rent-a-room scheme (meaning you will have to pay tax on the income you receive in rent). You should probably call revenue directly and explain what you are thinking of doing just to see what they say officially. They may accept that it could be considered your PPR if you have a family member living there in your place while you are away.

oxygen said:

Hi. I am going to rent out my first house. As I will be travelling for a year or more, I wont be living in it. The rent will be €600 a month which will keep me out of the investment property bracket and still in the rent a room scheme bracket.

Click to expand...

I'm fairly sure (at least it used to be like this) but if you are not the PPR (ie living in the property) you cant avail of the rent a room scheme.

oxygen said:

How will revenue look on me not living in the house and renting it to someone?
Will I be liable for stamp duty. It is a small house and only has two bedrooms.

Click to expand...

The revenue wont mind as long as you pay the right taxes - You may be liable for clawback stamp duty however if youve had hte property less than 5 years. Ive been abroad now for a few years so Ill leave it to the locals to advise you. I would recommend however, as someone who has done the same and subsequently remained abroad for much longer, to do everything above board. Register to the PRTB, pay tax on your rent, if you need help with tenants the PRTB can help you. You are not leaving yourself open for future tax problems or worries.
good luck
cas

As a non-resident landlord you either need to have an agent appointed to act on your behalf or suffer 10% withholding tax on the rental income.

Take professional advice in this regard - PM me for more information

Thanks for all the advice guys, its great. Domo when I know more defo what Im doing I will drop you a pm. I saw from another thread, if I do travel it will be work wanting me to work from abroad, so that falls under "work seconde me to travel" or something like that.

Also, pardon my ignorance, but will I be paying any taxes? the rent will be €600 and the mortgage will the €780 pm. Thats all I think I will get for the house, I might be able to get €700 maybe.

This sort of situation is covered in many existing threads. You need professional advice on your specific situation to ascertain whether or not your PPR status can be maintained and you can avail of the rent a room scheme. In most cases this is not possible in which case the property becomes an rental investment property and tax issues arise. See here.

Domo said:

As a non-resident landlord you either need to have an agent appointed to act on your behalf or suffer 10% withholding tax on the rental income.

Click to expand...

This is incorrect - the withholding tax rate is 20%

Domo said:

Take professional advice in this regard - PM me for more information

Click to expand...

Always be very wary of advice dispensed by PM unless you are 100% sure of the credentials of the person you are dealing with.

Yes, the withholding rate is 20% (sorry, a typing error).

Overall assuming your tax deductible outgoings are less than your income, no final tax liability will arise, but if you do not have an agent acting on your behalf, you will have a cashflow problem if the tenant withholds 20% of the gross rent and pays this over to the Revenue (as they are legally obliged to).

If you ultimately have no Irish tax liability this tax wittheld can be reclaimed, but the withholding in the meantime could potentially cause you hardship.