Taxation Information

Budget Update 10-10-17

Housing Assistance Payment Scheme will increase by €149m, enabling an additional 17,000 households to be supported and accommodated next year.
Funding for homeless services will increase by €18m.
€750m is to be made available for commercial investment in housing finance.
The level of stamp duty on commercial property transactions will rise from 2% to 6%.
Vacant site levy will increase from 3% in the first year to 7% in second and subsequent years.
A new house-building entity to boost construction has been announced.
The point at which an income earner attracts the higher rate of income tax will rise next year by €750.
Entry point for single earners will increase from €33,800 to €34,550.
The 2.5% USC rate will be reduced to 2% with the ceiling for the new rate increased from €18,772 to €19,372.
The 5% USC rate will be reduced to 4.75%.
The Earned Income Credit for the self-employed will rise by €200 to €1,150 a year.
Reduction in seven-year period for owners to enjoy full relief from Capital Gains Tax to four years.

Mortgage Interest Relief Residential Investments Update 12-10-16
The rate of tax relief for interest on borrowings used in the purchase, improvement or repair of residential rental property is increased from 75% to 80% in respect of interest accruing on or after 1 January 2017. It will increase by 5% every subsequent year until it reaches 100%.

Taxation is a very complex issue  but Revenue has produced a guide called A Revenue Guide to Rental Income which can be viewed here


Understanding the tax treatment of rental income in Ireland 2014

Where does rental income go – the Government takes the following:-

• Income Tax at marginal rate of 41% or standard rate of 20%.

• USC on total income @ 2%, 4% or 7%.

• PRSI on rental income at 4%.

•Local Property Tax – not allowable as an expense, but it is an expense to pay for services enjoyed by the tenant.

•Only 75% of mortgage interest (the money charged for borrowing) is classed by Government, and by Revenue, as a business expense, so 25% of payment to the bank is taxable as if it was rental income. This can result in a loss being taxed.

•Cost of improvements to a rental property cannot be claimed as an expense (even where it is being made more energy efficient) until the property is sold – but has to be paid for immediately. This is a disincentive to improving rental property.

•Replacing items, such as beds, while bought in a single year can only be claimed over an 8 year period.

If landlords and tenants are to have reasonable rents, good quality property, and an adequate supply, the Government need to sort out the tax treatment of the private rental sector to encourage more investment in it. Approximately 20% of all housing is in the rental market.

Please lobby your public representatives (TDs, Senators and Councillors) for fair treatment.