Tax Tips for New Landlords in Ireland

Firstly, if you have become a first-time landlord in Ireland, congratulations! Secondly, welcome to the world of Tax Return Plus!

We all know that tax is a complicated topic and when you add a property into the mix, it can become even more perplexing. But hopefully with our Top Tax Tips for New Landlords, we can make it easier for you.

Register and Declare Your Income Tax!

If you have any earnings from a rental property, it must be declared to Revenue. This can be done by registering for Income Tax to declare your rental income. This must be done from the first date of you letting your property. Once you are registered for Income Tax, you are then responsible for filing a yearly tax return informing Revenue of how much income you have made for the previous year.

Register with the Residential Tenancies Board (RTB)

It is a legal requirement for landlords to be registered with the Residential Tenancies Board which costs €90. However, once you are registered with the RTB, you can claim for a tax relief deduction for mortgage interest against your rental income and you can also claim the €90 fee as a tax deduction.

You are Responsible for the Local Property Tax

The Local Property Tax is a tax calculated by the market value of the property and it is the owner’s responsibility to pay the LPT. This cannot be claimed as an expense when completing your tax return.

Tax Liability

Some property owners will use rental income as a way to pay off the mortgage on the property. However, it is worth noting that only mortgage interest as opposed to the full mortgage payment can be used as an expense in your income tax return. An item that is regularly missed in calculating the profit on a rental property is capital allowances. Capital allowances are items that are long term in nature such as furniture. These items can be written off at a rate of 12.5% per year, in short, the item can be wrote off over 8 years at a rate of 12.5%

Preliminary Tax

Once you are Income Tax registered, you will have to pay a preliminary tax which is a payment towards your current tax year’s bill. If you are in your first year as a self-assessed taxpayer, then you will not be required to make this payment, but you can still pay a figure towards it for the following year to keep the cost down. If you choose not to pay any preliminary tax in your first year, you may end up paying double in the second year because even though you were not liable to pay it for the first year, the first year is still eligible to be taxed.

Other Expenses You Can Claim a Tax Deduction On

Allowable expenses include the following:

• Mortgage Interest
• Residence Tenancy Board Fees (PRB)
• Accountancy Fees
• Management Company Fees
• Letting Agents Fees
• Advertising
• Repair & Maintenance of the property
• Insurance Premiums

Enlisting the help of Tax Return Plus will ensure you minimise your tax bill as much as possible for a small fee starting at €299, which is also tax deductible in your tax return file! Get your free quote now.