Tax Relief on 2nd mortgage

L

liam1234

Guest
Just wondering can i claim tax relief at source on a second mortgage?
 
No TRS if it's an investment property - or are you talking about a second mortgage on your PPR?

Sprite
 
Its an investment property. Would you advise on declaring rental income on this property. Est €650 per month
 
liam1234 said:
Its an investment property. Would you advise on declaring rental income on this property. Est €650 per month
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Liam I don't think it's a case of what we advise you - you must declare rental income on this property - it's the law!
 
Ceist is it Taxable? Or am i right in saying that the treshold is €10000????
 
liam1234 said:
Ceist is it Taxable? Or am i right in saying that the treshold is €10000????
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No - the €10k threshold applies to rent-a-room in an PPR only. There is no minimum for investment properties.

You can offset interest paid on a loan to buy or improve an investment property against rental income - do a search on the forums here as there's lots of information.

Sprite
 
liam1234 said:
Ceist is it Taxable? Or am i right in saying that the treshold is €10000????
Click to expand...

It is Liam - someone might correct me but I'm pretty sure there is no threshold on rent received on interest properties. See plenty of existing threads on this such as this one. Also have you registered with the PTRB? You must do so.
 
Does it make any difference that the rental income will not cover the mortgage payments?
 
"Does it make any difference that the rental income will not cover the mortgage payments?"


No - that just means that you will definitely lose money... Tax relief is only available against the interest portion of the mortgage (do that search to see what the restrictions are for claiming) and you will be taxed at your highest rate for the remainder of the rent. Plus you will have to make up the shortfall in the mortgage payment.

So, assuming the entire mortgage qualifies for tax relief:

mortgage €1500 pm - consisting of €1000 principal and €500 interest
Rent incoming €1250 per month

You can offset €500 per month (interest) against rent so you have a taxable rent of €750pm (@41%) plus you have to pay an additional €250 per month mortgage.

Sprite
 
Make sure you are registered with the PRTB if you want to claim the mortgage interest as an expense.
Since your repayments are not being covered by your rent you should read the threads on this site which deal with the advantages of interest only mortgages.
 
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