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Tax Tips For Landlords

If you rent out property you will pay income tax on the difference between the rents you have charged in a tax year, less any allowable expenses and charges.


Allowable expenses include:

  • Mortgage or loan interest - You can claim for all the interest charged, but not the capital element of the loan repayments or the up-front costs of securing the loan.
  • Repairs - If you pay to maintain your property in its existing condition, you can claim for the expenditure incurred. However if you improve the specification of the property, say replace kitchen units with a more expensive design, then the Revenue may try and argue that the expenditure is an improvement. The cost of improving your property can be claimed against any capital gains tax when you sell, but will not be allowed as a deduction for income tax.  There are currently concessions relating to insulation and also for replacing outdated items such as single glazed windows with double glazing, this being the modern equivalent.
  • Furniture replacement - If you let a property furnished the Revenue will allow you to make a deduction for the depreciation and replacement of furniture. There are two ways in which you can do this.
    a) A 10% deduction - a figure calculated as 10% of gross rents receivable (after deducting council tax and water rates, if paid by the landlord), or
    b) The actual cost of replacing the furniture, but not the initial cost of installing the furniture in the property

You need to make up your mind which way to claim when you first let a property, and it will apply for the entire period of your ownership. It usually works out more tax efficient to claim the 10% wear and tear allowance.

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