If you have recently bought an investment property or you are thinking of renting out your own home, don't forget to do the following:
1. Inform the TRS section of Revenue that you have started renting out the property
TRS on mortgage repayments is not available on properties which are not your principal residence. If you forget to inform the Revenue and continue receiving TRS when you are not entitled to it, you can find yourself in a situation whereby you must repay all the TRS received in error. This can quickly add up and become costly. In order to inform the Revenue that you no longer wish to claim TRS, you must complete a TRS4 form which is available for download from www.revenue.ie
2. Register the tenancy with the PRTB
When you rent out your property you are required to register details of the tenancy with the PRTB within one month of letting the property. The cost of registering the tenancy is €70. If you fail to do this within one month, this cost of subsequently registering the tenancy increases to €140.
However, more important is the relationship between registration with the PRTB and claiming mortgage interest payments against your rental income. The singlest biggest expense which most poeple have to deduct against their rental income is the interest portion of their mortgage repayments. However, it is important to be aware that mortgage interest is only deductible where you have registered with the PRTB. Failure to register with the PRTB can therefore have costly tax implications.
More information can be found at www.prtb.ie
3. Pay the new NPPR tax
A new charge on "non principal private residences" was introduced this year. A payment of €200 is required to be paid to the local authority in respect of each NPPR. For 2009, this payment was required to be paid before 31st October. An additional charge of €20 per month is charged for each month that you are late in making payment.
Further information is available at www.nppr.ie . Payment can also be made online at this website.
4. Be aware of possible stamp duty implications
If you availed of a stamp duty exemption when you purchased your property, you should be aware of any possible clawback of this exemption which may arise when you rent out the property.
First time buyers can be exempt from paying stamp duty on the purchase of their first property, but this only applies when the property becomes the individual's main residence. If you are a first time buyer purchasing your first property with the intention to rent it out as an investment property, you are not entitled to the stamp duty exemption. If the property becomes an investment property within the first two years of ownership, a clawback of the stamp duty exemption applies and you may become liable to pay stamp duty on the property. Again, this can be an expensive outcome.
It is important to be aware of the possible tax implications that arise when you let a property. If in any doubt, contact Fenero.