Gross Rental Income less Allowable Expenses less Capital Allowances equals Taxable Rental Income...


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Allowable Expenses

The following are examples of the type of expenses that may be claimed for :

  • Insurance costs
  • Management Fees
  • Advertising Costs
  • Accountancy fees relating to rental income
  • Mortgage Interest paid "on monies borrowed for the purchase, improvement or repair" of the property
  • Repairs and decorating costs
  • Cleaning
  • Local Authority Property Registration Fees

Capital Allowances

An allowance for Wear and Tear of furniture and fittings can be claimed in respect of all furnished properties. This normally will cover such items as carpets, appliances, central heating, furniture, etc

From 1 January 2003 the allowance is 12.5%, per year, each year for 8 years. Prior to this, the allowance was 15% per year for the first 6 years and 10% in the year 7. An itemized list of capital expenditure should be attached to each year's tax return so that the allowance can be calculated. Example Rent Account The following is a typical example of a Rental Income Computation

 

Gross rent

8,400

Less Allowable Expenses

 

Letting Agent Fees

1,120

Allowable Interest

3,000

Repairs

800

Electricity/Heating

100

Accountancy Fees

250

Cleaning costs

120

 

5,390

Rental Income

3,010

Wear and Tear Allowance

1,200

Furniture & Fittings

Say Cost 6,000 x 20%

Taxable rental income

€1,810

 

 

 

 

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