Very simple income tax question relating to rental income...

I

irishbogger

Registered User
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Hi folks,
Next week I hope to purchase an investment apartment.

The apartment will be a cash purchase from savings, no loan/mortgate

I have not had any income in the past 2 years (living off savings) - no state benefits, absolutily zilch.

Can anyone tell me what rate of income tax I would be expected to pay on a rental of 720euro PCM, net income to me would be about 600PCM after service charges

-Edit- I will not be using any letting agency etc. I do not plan to renovate the apartment this year, simply rent it out. Money will be going directly into my bank account on a monthly basis

Many thanks for your help on this issue.

PS. I will of course go to an accountant/solicitor when it comes to crunch, I just want to get an idea myself first
 
On that level of income, you will not pay income tax, but will be subject to USC (2%) and PRSI (4%).
 
Nige said:
On that level of income, you will not pay income tax, but will be subject to USC (2%) and PRSI (4%).
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Wow, that is a relief, I was reading of large taxation figures. Thank you for that.

While I have your attention... Can I ask if this will be self-assessment?
 
Yes, it will be self assessment and you do have to declare the income, even if there is no liability. You may even have a net loss in the first year if you have rental agent fees, fit out costs etc, and you can carry that loss forward. This could be valuable in future years.
 
David Quinn said:
Yes, it will be self assessment and you do have to declare the income, even if there is no liability. You may even have a net loss in the first year if you have rental agent fees, fit out costs etc, and you can carry that loss forward. This could be valuable in future years.
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Thanks for this info which I picked up when reading elsewhere earlier.

It is hoped in the first year to simply rent the property as is (there are tenants currently in the property... different question re. lease agreements later!) therefore not sustain a loss.

With the income from Year 1, I can then refurbish the apartment.

It is also my understanding that if I were to refurbish the apartment before I put in the first tenant (pre tenancy refurbishment) then the cost is not tax exempt, but if I do the refurbishment inbetween tenants the cost is tax exempt. I may be wrong on this, it is simply my understanding
 
irishbogger said:
It is also my understanding that if I were to refurbish the apartment before I put in the first tenant (pre tenancy refurbishment) then the cost is not tax exempt, but if I do the refurbishment inbetween tenants the cost is tax exempt. I may be wrong on this, it is simply my understanding
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Yes, that is my understanding also. Slim
 
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