I have my own 3 bed appartment. It's my primary residence and I have rented out 2 rooms. DO I have to pay tax on the rental income - its about 10k. I rang the revenue about a year ago and was told I don't.
This is wrong. The owner occupier rent a room scheme allows an owner occupier to rent rooms in his/her
PPR and collect up to €7,620 in rental income with no income tax (must still be declared though),
CGT or stamp duty implications. If you exceed this amount then you are treated as an investor so that all income (less allowable expenses) is assessable for income tax, some portion of any resale gain will be assessable for
CGT and if the rental happened within 5 years of purchase of the
PPR then a clawback of
SD applies from that date. The
Property Investment FAQ summarises the tax treatment of rental properties.
some saying I don't pay tax if the rental income is less that the yearly mortgage repayments
No - this is not correct.
I've also heard that I do have to pay tax put that I can write off any expences (domestic appliances, interior decor ect) against my tax bill. If this is the case can I write my mortage insterest off the rental tax as well?
You can write off certain expenses including mortgage interest against rental income although you cannot also claim owner occupier mortgage interest relief on the same interest.
I'm not 100% sure how things work when you are an owner occupier landlord who cannot avail of the rent a room scheme because the rental income exceeds the threshold but you definitely need to sort out your tax situation here as a matter of urgency.