Income tax on rent, worked example, in Ireland
June 20, 2017
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1 The property is jointly owned by husband and wife. Currently, lettings of less than ten years are exempt from VAT. It is possible to waive this exemption and if a ‘waiver’ is applied for, VAT should be charged at 23% on the monthly rents.
2 Rental income paid to a non-resident landlord is subject to 20% withholding tax. This tax is then available as a tax credit when the couple files their annual income tax return.
3 Estimated values. Income-generating expenses are all deductible from the gross rental income.
4 Capital allowances may be available on the cost of any fixtures and fittings provided with the building and the deduction is given over eight years (e.g. 12.5% per annum).
5 These income tax rates are applicable to a married couple with two incomes. A different set of tax bands is applicable for the following classification of taxpayers: single person, married couple with one income, one-parent family.
INCOMTE TAX 2015 FOR MARRIED PERSONS, SPOUSE WITH INCOME
|TAXABLE INCOME, IRR (US$)||TAX RATE|
|Up to € 67,600||20%|
|Over € 67,600||40% on all income over €67,700|
6 The 2% health levy is levied on the taxable income over €22,880 of each taxpayer. Once this threshold is exceeded, the health levy is applied on the whole taxable income.