Tax on Rental Income

This is a very common question. The short answer is yes. You are obliged to submit a tax return if you are in receipt of non PAYE income. This is irrespective of whether the property is profitable or not.

Although the rental income goes fully towards paying the mortgage you may still have a taxable profit. This is because only the interest element of the repayments are allowable as a tax deduction. Since April 2009 this has been reduced further and only 75% of the interest qualifies for a tax deduction. You must also have registered the property with the Private Residency Tenancy Board (PRTB) to claim a deduction for interest incurred.

If you have made a taxable loss on your rental property this loss can be carried forward and offset against future rental profits.

If you would like some assistance in registering with Revenue and completing your tax return, please feel free to get in touch with your local TaxAssist Accountant. We provide accountancy services in throughout the country.

Date published 21 Feb 2013

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.