All let Property Management

The following is intended as a rough guide to the implications of property ownership. It is not comprehensive and does no purport to be a legal interpretation of the relevant legislation.

Tax implications:

Budget Measures 2005

The following changes have come into effect on 2/12/2004 and the Budget of 2005 has made little change to the current situation except in relation ot Non-Residential Properties where the main change is in respect of changes to the Stamp duty rates and thresholds for transfers, conveyances and leases of non-residential property(see table below).

Interest arising on and from 1 January 2002 on borrowed money employed in the purchase, improvement or repair of rented residential properties by an individual, partnership or company continues to be allowed as a deduction for tax purposes against rental income

There was no change announced to the measures introduced last year regarding Capital Allowance write off in respect to the refurbishment/enhancement of accommodation for residential purposes. These changes introduced enabled for the treatment of expenditure incurred in the enhancement and refurbishment of residential accommodation as a capital allowance with a 20% write off each year. This has a major impact as prior to this only necessary repairs were allowed. Any expenditure which tended to increase the value of the property was not allowed to be set against a landlord's tax liability. We would strongly advise you to discuss all tax planning matters with a suitable qualified tax expert before committing to a large investment in residential property

Changes in Stamp duty rates for first time buyers effective from conveyances executed after the 2/12/2004. These changes relate to FIRST TIME BUYERS of second hand homes only

Minister Cowan has not made any modifications to the stamp duty regulations on all properties(new or secondhand)purchased by investors. The main changes are the introduction of a uniform scale which will apply to investors and persons purchasing a property as a principal private residence. The following scale applies and continues to be effective

Stamp Duty on Non-Residential Property
Stamp duty rates and thresholds for transfer, conveyances and leases
of non-residential property. The new scheme of rates will not only apply to commercial property but also to goodwill, intellectual property, debtors and cash on deposit. The new scale provides for a 9% where the amount is in excess of €150,000. The rate of stamp duty as outlined above remains unchanged

If you feel our advice please contact us and we should be glad to offer our advice.

Tax Relief for Tenants

All measures take effect from 1 January 2005 unless otherwise stated.

Allowance for Rent Paid by Certain Tenants
For those aged under 55 years of age, the maximum level of rent paid for private rented accommodation on which tax relief can be claimed, at the standard rate of tax, is being increased from €1,270 to €1,500 per annum for a single person and from €2,540 to €3,000 per annum for widowed and married persons. This equates to a tax credit of €300 per annum for single persons and €600 per annum for widowed persons and married couples. For those aged 55 years and over, the maximum level of rent paid on which tax relief can be claimed is being increased from €2,540 to €3,000 per annum for a single person and from €5,080 to €6,000 per annum for widowed and married persons. This equates to a tax credit of €600 per annum for a single person and €1,200 for widowed and married persons.

Also remaining is relief for owner/occupiers of private accommodation to rent a room without changing the manner in which the present assessment by the Revenue Commissioners. In effect anybody can have rental income up to a maximum of €7618 in any tax year without losing mortgage relief and the accommodation would not be liable to be charged C.G.T. should the owner decide to sell the property. Stamp duty relief would also apply as if the accommodation was used as a principal private residence at all times.

Occupants wishing to avail of rental relief should obtain the relevant claim form from their local tax office. The R.S.I. number of the landlord is required when submitting the claim form. This can be obtained from the Landlord or the Landlord's Agent.

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