Now that the Summer has finally arrived it’s time to get ahead of the September tax deadline rush. We asked Breda, our Landlord tax returns expert for some tips to remember in 2016.
Top Tips for Irish Landlords 2016
1. Register for the PRTB
You are required to register each residential tenancy that you have with the Private Residential Tenancies Board. It currently costs €90 for each registration and you should register within one month of the tenancy commencing. This fee is fully deductible from your Rental Income as an expense – but it is especially important if you have a mortgage – Mortgage Interest (more on that later) cannot be claimed as a deduction if your PRTB is not up to date.
2. Cancel TRS on your mortgage if not living in the property
Did you know that once you leave the property it is no longer deemed your principle private residence and therefore you are no longer eligible to claim Tax relief on your mortgage? This get’s forgotten a lot!
If you do not cancel the TRS and continue to receive this relief after the date of first rental you will be required to repay this amount to Revenue once it is discovered that you no longer reside at the property.
3. Claiming the correct percentage of Mortgage Interest as an expense.
Mortgage interest relief is an allowable expense that can be claimed against your Rental income. You can only claim 75% of your mortgage interest against your Rental Income, a common mistake that many landlords make is claiming 100 % of the mortgage interest paid. It’s so important, we’ll say it twice – you must also be registered with the PRTB to be able to claim it as an expense.
4. Hold receipts for all repairs
Many forget the importance of holding onto receipts when purchasing items for their Rental property. It may sound simple but a shoebox in the corner can save a lot of hassle in the long run. Most expenses are allowable and reduce your overall Rental Income profit. Don’t spend time worrying if it is eligible or not – let us check them for you!
Revenue can ask to see a copy of your receipts at any time and if you cannot provide them then they will amend your Rental Income return and this will lead to a liability owing to Revenue.
5. Accountancy Fees
When completing your Rental Income return we would advise that you get an expert to complete the return for you to ensure that your Rental Income return is prepared and submitted to Revenue correctly. This will also result in accurate filing and no scary surprises when Revenue do a review of your return and discover incorrect calculations which could lead to a hefty tax bill. This is also deemed a tax deductible item and is fully claimable against your Rental income.
Rental Income Client Manager