With the growth in the number of people renting out their homes for the first time and moving into rented accommodation the issue of taxation on rental property has become a hot topic.
Tax Advisor and owner of TaxAssist Accountants, Simon Bain of Bridge Street, Portlaoise commented ‘I have definitely come across lot of people who have found themselves as landlords unexpectedly and they are often not fully aware of their obligations to file a tax return, and what the potential ramifications are if they fail to do so’.
Generally speaking, as a landlord your tax bill will be calculated by deducting the expenses you have incurred from the income (rent) you have received.
This begs the question, what expenses are allowed?
Simon explains “Things people tend to forget to include would be advertising expenses or estate agents fees, accountant’s fees, refuse and other service charges.
“As well as that, lots of people tend to calculate their mortgage interest incorrectly and they do not include capital allowances on things like furniture.
“As a result they are calculating their final bill incorrectly – losing out on tax savings and potentially getting themselves in hot water’.
Another piece of advice is to ensure that you register with the Private Residential Tenancies Board, (PRTB).
If you are not registered with the PRTB you will not be allowed to claim some reliefs so it is important you do this.
For those who are just renting out a room in their house the rules are slightly different.
You can earn up to €10,000 tax free but this is something you have to claim so you will need to file a tax return.
Simon offers the following advice to his clients ‘consider operating a separate bank account for rental activities, this will make filing your tax return a lot easier and if you are moving abroad for work and renting out your family home make sure to appoint an Irish agent to collect your rent.
Above all make sure you are claiming all of your deductions and that you engage with Revenue before the 31st of October.
Very often the cost of engaging a professional to do this will give you piece of mind and will often save you money’.
Simon and his team are offering free consultations to landlords across Laois and Offaly at their offices in Portlaoise.
For more information phone 057-8682285.
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