Tax On Rental Income

[Canaryman]

Hi,
Can anyone explain how Rental income is taxed? Do you pay tax if the rent is lower then the mortgage etc?

Thanks

 

[Newby]

Have you read the guide to rental income on the Revenu website??

[broken link removed]

 

[ClubMan]

Do you pay tax if the rent is lower then the mortgage etc?

It seems to be a common misconception that if the rent is lower than the mortgage then no tax liability arises! You should also check out the AAM Property Investment FAQ and probably get professional advice.

 

[davidoco]

Very simplified calculation

Assumption that your PAYE income is taxed at source and all credits and tax cut off (bands) used income over 38k married, 32k single

Rental income of €8,000
Less upkeep, insurance €1000
Less INTEREST part only of mortgage repayment (must be a qualifying loan) on the property €3000
= Net profit €4,000 taxed at 42% therefore tax payable of €1680 – payable in October each year.

 

[Newby]

The taxation will depend on the individual circumstances of the OP, such as renting the property vs renting rooms in his PPR. If you are renting a whole house read the key posts in the Taxation section of AAM and seek professional advice!