Tax on rented property

[dec1892]

Hi,

Quick question (I think!) - I have tax bill of €2,900 for tax year 2010 to pay on an investment property which I get €1,000 in rent per month (€12,000 per annum).

I know the above tax due of €2,900 is derived from (rental income minus 75% interest paid minus management fees minus insurance) x 41%.....I'm trying to figure out what amount of expenses I would need to have spent in 2010 so to avoid having to pay any tax??
By my calculations I would need to have spent €7,100 approx (i.e. 2,900/41%) on expenses in 2010 so as to avoid having to pay any propoerty tax - is this right?

I'm not really clued in that much to tax issues really but trying to educate myself cos there's no way I can afford having to €3000 each year in property tax!

Thanks

 

[Bronte]

I'm not really clued in that much to tax issues really but trying to educate myself cos there's no way I can afford having to €3000 each year in property tax!

You mean income tax. If you can't afford the property you should sell it. You must have other income, plus the rental income if you are paying the 41% tax rate. This is what you should use to pay the income tax due on rent.

 

[Gervan]

41% income tax plus 4% Prsi plus 7% USC would be the tax take.
If you were in a position of not having any tax to pay, wouldn't your expenses equal your income?

 

[dec1892]

Yes, I mean income tax (not property tax)

Its possible to avoid income tax on a rented property if you have sufficient expenses spent on the investment property over the course of the year which will offset the rental income though???