Rental Income and IRS

BobT · Post by **BobT** » Wed Feb 02, 2005 12:42 am

Just been to my accountant today, and came out with a smile, so I thougth I would share it with you.

Our primary income is from renting a property in CV. I have a registered the business with the financas in my own name and contrubtion number. I elected to go for the simplified accunting process, and with and estimated gross income of more than 10K euros registered for IVA.

I learnt today, that whilst I must charge IVA on my rental, and pay the financas the IVA, the IVA on rentals is 5%. Not great but not a disaster. Much better news was that 80% of tghe gross income is considered business costs for a tourism business, so I only pay IRS on 20% of 95% of the gross income.

I can also offset the cost of both life and medical/health insurance for my wife and myself.

As I am VAT registered, I can claim back the VAT on all of the utilities (water, electricity, phone, internet, and gas), plus the VAt on all refurbishement and maintenance costs, plus costs on ew furnishing and fittings.

Without giving too much away, I am quite happy that my IRS tax liability is less than 10% of my gross income and probaby less than 20% of my net income.

And it is Feb 1st not April 1st

And the sun shone all day.

Just need a result from the Camara and that's the hat trick!

Guest · Post by **Guest** » Wed Feb 02, 2005 9:39 am

Thats very good info ....may I encourage other posts like this..as a newcomer to renting out property from this summer..all these inputs help me a lot.......now just tell me your secret on letting so succesfully ??....Only joking , but any tips are always helpful..

Guest · Post by **Guest** » Wed Feb 02, 2005 12:48 pm

delighted with such news..but how much does the accountant charge to save all this tax....my experience is that the tax saved always seems to be about the same as their fees