Working out Wear n Tear offset for tax on rental income

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galleryman

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This is my first time renting out a property.
I will be renting fully furnished.
I understand that I can write down the value of fixtures and fittings etc at a rate of 12.5% per Yr over 8 yrs for wear N tear.

My questions is this, what value can I put on the furniture and Kitchen, and white goods, etc?

Some furnishings are very new, some are 8 yrs old already but were very expensive 8 yrs ago and would still be worth a lot of money, e.g. Wardrobes that cost €1,000 each 8 yrs ago. We paid €10,000 for a new kitchen 3 yrs ago etc etc.

Where can I find the rules for what is excluded from the wear n tear list, and how I go about placing a value on the fixtures and fittings/contents at the start of a Renting period?

Thanks.
 
What would be excluded are items considered part of the structure, e.g. tiles, heating systems etc. Included would be fitted units, loose furniture, down to microwave etc. There is no definitive list of what's in or out as such but there are a number of past posts on this issue on AAM which might fill in more for you.

Value would be reasonable value at start of letting period, what you would expect to pay for such items in that age and condition. Again, no hard rules, but such values are reasonable.
 
galleryman said:
This is my first time renting out a property.
I will be renting fully furnished.
I understand that I can write down the value of fixtures and fittings etc at a rate of 12.5% per Yr over 8 yrs for wear N tear.

My questions is this, what value can I put on the furniture and Kitchen, and white goods, etc?

Some furnishings are very new, some are 8 yrs old already but were very expensive 8 yrs ago and would still be worth a lot of money, e.g. Wardrobes that cost €1,000 each 8 yrs ago. We paid €10,000 for a new kitchen 3 yrs ago etc etc.

Where can I find the rules for what is excluded from the wear n tear list, and how I go about placing a value on the fixtures and fittings/contents at the start of a Renting period?

Thanks.
Click to expand...

It seems as if you are just about to start renting , in which case items bought 8 years ago were not purchased for the purpose of kitting out your rental property so therefore can not be claimed. This document from revenue.ie will answer all your questions. http://www.revenue.ie/en/tax/it/leaflets/it70.html
 
Landlord,


see excerpt below from your link. I read this yesterday and couldn't see any specific reference anywhere to my original question.

where does it say that the items claimed for MUST be purchased for the purpose of kitting out a rental unit? To me it just states the claim must be based on the cost of the furniture.

I'm not doubting you, I just don't see where it says what you have said.

"What expenses can be claimed for Wear and Tear?

If a premises is let for residential purposes and it is furnished, a claim can be made for a wear and tear allowance based on the cost of the furniture and fittings. It will be necessary to retain an itemised list of expenditure incurred each year.
  • With effect from 4 December 2002 the allowance is 12.5% per year over 8 years.
  • For the period between 1 December 2001 and 3 December 2002 the allowance was 20% per year over 5 years. Transitional provisions apply allowing the rate of 20% per year over 5 years if the item was acquired under a written contract before 4 December 2002 and the expenditure was incurred before 31 January 2003.
  • Prior to 1 January 2001 the allowance was 15% per year for the first 6 years and 10% in the 7th year."
 
I think this is the relevant extract.....

What expenses cannot be claimed for?

  • Pre-letting expenses, i.e. expenses incurred prior to the date on which the premises was first let apart from auctioneer's letting fees, advertising fees and legal expenses incurred on first lettings
 
my understanding is that you can claim for a suitable current value. We let a house which had gone through probate. There was furniture in the house which was valued at €20k at the time of probate. This was the figure we took and then took 12.5% off per annum.

As it is your first year letting, it would probably be worth getting an accountant to do the figures (if you have everything detailed out neatly and clearly, it shouldn't cost too much). At least this will mean you have claimed correctly from the 1st year and it will give you a template going forward.
 
Fixtures & Fittings attract a Wear and Tear offset of 12.5%. Can the interest on that portion of the mortgage which has been acquired to purchase such Fixtures and Fittings also be used to offset against rent for tax purposes?
In a complete house refurbishment what would be deemed by Revenue to be required for a fully furnished letting over and above what would be Fixtures & Fittings?? Does a kitchen qualify??
 
Illuminating thread.

In 2008 (due to higher interest rates) the interest cost of my mortgage exceeded my rental income by circa €3,400. In 2009 my rental income exceeded my mortgage interest payments (@75%) less other expenses by circa €3,300. Can I offset my '08 losses against my '09 gain ? If so, am I setting the gross loss (3,400) against the gross gain (3,300) or the tax payable on the gross gain (1,419). Can I carry forward the excess against any gains made in '10 (100 or 1,981) ?

Sorry, just noticed that this isn't about wear & tear, please move as necessary.
 
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