Rental property

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Short Term Rental & Airbnb Review

Revenue have issued a review in regard to short term leasing from January 2020. Revenue have now defined that;

Income for providing short term accommodation for occasional visitors such as through an online accommodation booking system is not considered rental income (Case V) and is taxable as “other income” (Case IV) if occasional income or as “trading income” (Case I) if operated as a trade such as a guesthouse.

Therefore, in summary, Airbnb rentals and similar short-term rentals are no longer considered rental income and are to be declared as ‘other or trade income’.

What does this mean for my return?

Capital allowances (expenses subject to wear and tear) are not allowable against the profits of income under Case IV. However, expenses incurred to provide such accommodation are an allowable deduction such as ; commission fees, cleaning fees, reasonable cost of light and heat. Annual costs such as insurance, tv licence and general repairs and maintenance are no longer an allowable expense against profits under Case IV.

VAT

Now that this income is considered ‘other income’, You must register for VAT if your income is likely to exceed €37,500 per year. The VAT rate for short term accommodation is at a reduced rate of 9% and applies to;

  • Letting of a room(s) in a hotel or guesthouse.
  • Short term lettings of all or part of a house, apartment or similar building.
  • Letting of a part of a caravan park or similar place.
  • Letting of a part of a camping site or similar place.
  • Provision of any other holiday accommodation.

However, the provision of student accommodation is exempt from VAT.

A VAT registered business providing taxable short-term accommodation may reclaim Value-Added Tax (VAT) incurred on their business costs under the normal VAT rules.

Should you have any queries on this issue, please contact us on 01 5397999 or request our application here

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Revenue now communicating with Residential Tenancies Board on rental properties

The Residential Tenancies Board (RTB) have always shared information with Revenue, but this will be the first year Revenue have sought confirmation that a landlord has registered with them in order to claim tax relief on their mortgage interest paid.

As reported in the Irish Times on Friday 06.09.19, landlords will need to ensure they have registered their properties with the RTB before October 31st.

Revenue have also pre-populated this year’s Form 11 tax forms with rents shared by local authorities for those letting out properties through HAP.

Read more on this article click here

Why not also read our Rental Income including Airbnb blog here

Should you have any queries on this issue, please contact us on 01 5397999 or request our rental income and application form here

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Capital Gains Tax on rental properties

Interesting article issued in The Irish Times today regarding selling a rental property in negative equity.

A reader asks –

is there any capital gains tax due if mortgage was paid off and sold at a loss?

Let’s clarify, there is only Capital Gains Tax (CGT) due if there is a gain on the sale of property, which in this case would be zero. The gain is simply the sale price, less the cost price including other allowable expenses and reliefs. Any outstanding mortgage is irrelevant.

There will be no capital gains tax to pay and you will have a loss that can be offset this year against any gains you may make on the sale of other assets.

This loss can also be carried forward and offset against any future gains.

Regarding VAT, this area depends on a number of factors and each case needs to be reviewed in order to evaluate.

Read more on this article here

Have a query regarding this? Contact us today 01 539 7999
Why not read some of our previous blogs here

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