The Rented Residential Tax Relief
In these uncertain times there is a great deal of focus on the negatives, particularly in terms of the housing market. We are consistently reminded of how astronomical prices are, and how difficult it is for people to get on to the property ladder to begin with. Following on from our previous posts we have decided to turn our focus towards the positive and offer or friends and followers vital information on the various forms of assistance and relief available to them in various situations.
Today we will focus on Section 23 Relief which has been one of the most successful property tax reliefs in Ireland to date. Section 23 Relief is a form of rented residential relief and applies to properties within a tax incentive area and is available to individuals who have incurred expense on the purchase, construction, conversion or refurbishment of a property and who lets that property for its first use on the open market. This has, over the years, resulted in a marked improvement in the quality of rental accommodation in some areas. The relief can be set against the rent received and will serve to reduce the amount of the individual’s taxable income.
In order to assess your property’s eligibility for the scheme, it is vital to check that the property is within a qualifying area and also that the work was carried out within the required time period as no payments can be made in advance of work being carried out. This relief does not extend to furnishing costs and the property must be used as a dwelling or shop unit and for no other purposes.
The owner must rent the property for a period of 10 years from the first letting and certain conditions will apply in the event of the property being passed on which may make these properties attractive prospects for the next owner.
Should your property not qualify for Section 23 Relief it would be worth checking if perhaps Owner-Occupier Relief would apply to your circumstances.
As always, we are available to answer any queries on all business and financial matters and we look forward to speaking to you soon.