Rental Income - Allowable deductions
March 13, 2022
There are a number of expenses that a landlord can claim against rental income. We take a look at what can and can't be deducted from this income source.
The good news, You can deduct:
- Utility bills such as rates, light and heat, phone, refuse collection etc.
- Rent that you pay for the property.
- Repairs and maintenance i.e. general upkeep on the property.
- Insurance and management expenses.
- Pre-letting expenditure in relation to a vacant property (first let before 31/12/2021). The cap on this expenditure = €5,000.
- The cost of registering with the Tenancies Board.
- Loan interest (money borrowed to buy, improve or repair the property).
- Certain mortgage protection policies.
- Pre-letting expenses such as advertising and legal fees.
- You are entitled to 12.5% per annum over 8 years of the cost of qualifying assets that you purchase for your property e.g. fixtures and fittings.
The not so good news, You can’t deduct:
- Capital/enhancement expenditure e.g. building an extension.
- Where the property is not registered with the Tenancies Board you are not entitled to deduct loan interest.
- NPPR and LPT charges.
- Putting a value on your own time e.g. for upkeep of the property.
- Pre-letting expenses (other than exceptions noted above).