Advisors.ie

The Irish Property Owners Association have called for loan interest to be given a 100% write off as a business expense for landlords the same as it is done for commercial property owners or for any other business that has a loan – currently landlords can only offset 75%. Here’s an example, you pay the bank €1,000 in mortgage interest and you receive €1,000 in rent, your income is zero, if this is a commercial property then it stays as zero, if you were a newsagent with a big loan it stays as zero, but if you are a landlord of a residential building then you have made a profit of €250. Now, if you can add or subtract you know this isn’t true, but that was the rule that was brought in by Fianna Fail in their 2009 budget, and it is a shining example of ill thought out discriminatory taxation. The idea was simply to ‘grab or steal’ money by doing this, and it means that struggling borrowers who are providing housing to often vulnerable people are being taxed even if they don’t break even at the income tax rate which is the highest available rate we have! Having the same rules for loan interest as an expense for all business activities makes total sense, treat all businesses equally, and don’t tax profits that don’t exist, I hope the Government listen to them, they want professional landlords, but here’s a hot tip- you won’t get them by robbing them in this manner.