The rental sector has changed substantially over the last 24 months, with many different factors contributing to the changes. Covid, moratoriums on evictions and housing shortages have all contributed to the changes in the rental market. Because of these changes, there is uncertainty for both landlords and tenants alike.
In this article, we will be answering a question that our property managers are often asked: “Can a landlord claim Mortgage payments on a rental property?”
So what’s the answer?
In summary, the answer is yes, in some instances, it is possible to claim back tax on mortgage payments. This process is known as Mortgage Interest relief, but there are caveats to who can claim.
What are the criteria?
You can claim mortgage interest relief if you are:
- Registered with the RTB (Residential Tenancies Board)
- In between tenancies and are not living or occupying the property.
To qualify the property must
- Have a mortgage on the property
- The mortgage must be used to purchase, repair or improve the property.
What can I claim?
| Mortgage Interest Relief is restricted to a percentage of the interest as follows: | Percentage |
| Interest accrued on or after 7 April 2009 to 31 December 2016 | 75% |
| Interest accrued from 1 January 2017 to 31 December 2017 | 80% |
| Interest accrued from 1 January 2018 to 31 December 2018 | 85% |
| Interest accrued from 1 January 2019 | 100% |
Taxable expenses for rental income
As a landlord, you are entitled to claim general expenses against your rental income. By claiming these expenses, you reduce the amount of tax that you have to pay. The law classes general expenses as
- Local authority rates
- Rents that you are required to pay such as ground rents
- Some insurance premiums such as fire and liability
- General property maintenance, for example, painting and decorating
- Expenses incurred before signing a rental agreement such as marketing, legal and advertising
- Cost of any service that you provide that your tenant does not pay for e.g. water, wifi, electricity.
- Certain Mortgage Protection policies
- Capital Allowances
- Certain structural repairs such as rot damage
- Registering your property with RTB
- Other general expenses
To claim tax back on general expenses you must keep accurate detailed records of each property you rent out along with the corresponding receipts that you wish to claim tax back on. If you only rent a part of your property you may only be able to claim a portion of the tax back.
If you have a property management company, they will often claim these expenses on your behalf.
Property Management Dublin
KPM is a bespoke specialist property management company based in Dublin. With over 20,000 properties under management, we are capable of managing portfolios for small landlords with 5 or fewer properties, large owner-management companies, and right up to large institutional investors. Our decades of experience allow us to keep your property occupied, profitable and preserved.
Let us help you take control of your investment properties and maximise their profitability.
Contact us today for more information.
