Revenue are investigating sales of overseas property by irish residents according to the Sunday Business Post.
If you have investment property in Ireland or abroad, it is worthwhile spending some time checking that you are tax compliant.
For tax purposes it is necessary to keep a record of all rental income received and all expenses relating to the investment property.
The difference between rental income receivable and expenses paid is the taxable profit.
Expenditure on furniture and fittings can be written off over 8 years as capital allowances.
Pre-letting expenses are not allowable. Travel to overseas investment properties is not allowable either.
Mortgage interest – 75% of this is allowable against rental income provided the tenancy is registered with the Private Residential Tenancy Board (PRTB).
Each change of tenancy must be registered with the PRTB. This registration lasts for four years or the cessation of the tenancy if earlier.
Non Principal Private Residence levy (NPPR) of €200 was introduced from 2009 for all properties held that are not the owners principal private residence. This charge is not an allowable expense for tax purposes. It only applies to properties in Ireland and is payable whether the owners are resident or non resident.
When purchasing a property abroad, enquire what other taxes are relevant in that particular country. It will be necessary to complete a tax return in that country if the property is rented out
If you are a non resident landlord with a property in Ireland, the tenant is obliged to withhold 20% of the rent and pay it to the Revenue. This can be avoided if the landlord nominates a third party who is resident in Ireland to be their collection agent. The rent is paid to the agent who does not have to withhold 20% of the rent for tax. However they must ensure they hold enough to cover any tax payable.
Professional advice should be sought before relying on the above outline.