RENTAL EXPENSES – WHAT CAN BE CLAIMED?

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Rents are increasing so landlords must ensure they claim all their rental expenses to minimise their tax.

rental expenses rental income rents

Taxable rent is the difference between rental income and rental expenses paid.

What rental expenses can be claimed?

Landlords can claim rental expenses for all expenditure incurred during the letting of a property and in between lettings.

PRE-LETTING EXPENSES

Up to the passing of the Finance Act 2017 on 25th December 2017, pre-letting expenses were not allowable.

The can now be claimed subject to the following:

  • Be a vacant premises for the twelve months prior to the date of first letting.
  • Shall apply to expenditure incurred before 31st December 2021.
  • The expenses must be under €5,000
  • There will be a claw back if the landlord ceases to let the residential premises within a four year period starting from the date of first letting.

EXAMPLES OF CLAIMABLE EXPENSES:

  • Rents and commercial rates payable on the property  e.g. ground rent, water rates,refuse collection. These are responsibility of the tenant but are claimable if paid by the landlord.
  • Gas and electricity if paid by the landlord.
  • Maintenance Repairs. However, landlords may not claim a deduction for their own labour.
  • Insurance of the premises against fire, public liability insurance, etc.
  • Management expenses of property – for example estate agent fees, advertising costs.
  • Accountancy fees incurred for the purposes of preparing a rental income account.
  • Wear and Tear on furniture and fittings, e.g. carpets, cookers, central heating etc.

INTEREST PAID ON LOANS

  • Only interest relating to the actual purchase, improvement or repair costs is deductible.
  • For the year 2006 onward interest is not deductible where the person making the claim has not complied with the registration requirements of the Private Residential Tenancies Board in relation to any tenancies in the particular residential premises.
  • The landlord can claim 75% of interest payable on residential property. This increased to 80% from 1st January 2017.
  • It is possible to claim the disallowed 25% of interest payable from the 1st January 2016. The landlord should let the property to tenants who are in receipt of certain housing benefits. The landlord must submit a Declaration of Undertaking to the PRTB at the start of the tenancy and lodge a claim to the Revenue after the three year period.

Please contact us for further information