1. What is Net Rental Income?

Net Rental Income is the amount left after deducting all allowable expenses from your gross rental income. In Ireland, certain expenses can be deducted when calculating taxable rental income.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Gross Rental Income — Total rental income before any deductions
• Repairs — Cost of repairs to the property
• Insurance — Property insurance premiums
• Interest — Mortgage interest payments
• Management Fees — Fees paid to letting agents
• Wear and Tear — Depreciation of furnishings (12.5% per year over 8 years)

3. Importance of Calculating Net Rental Income

Details: Accurate calculation of net rental income is essential for proper tax reporting in Ireland. It determines your taxable income from rental properties and helps with financial planning.

4. Using the Calculator

Tips: Enter all amounts in EUR. Include all allowable expenses to get an accurate net rental income figure for tax purposes.

5. Frequently Asked Questions (FAQ)

Q1: What expenses are allowable against rental income in Ireland?
A: Allowable expenses include repairs, insurance, mortgage interest, property management fees, and wear and tear on furnishings.

Q2: Can I deduct mortgage principal payments?
A: No, only the interest portion of mortgage payments is deductible, not the principal repayment.

Q3: How is wear and tear calculated?
A: For furnished properties, you can claim 12.5% of the cost of furnishings each year for 8 years.

Q4: Are improvement costs deductible?
A: No, capital improvements (like extensions) aren't deductible as expenses but may qualify for capital allowances.

Q5: What about local property tax?
A: Local Property Tax (LPT) is not deductible when calculating rental income for income tax purposes.