Robert Troy (Longford-Westmeath, Fianna Fail)
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209. To ask the Minister for Finance if there is a scheme in place to help a family/person who own a property in negative equity and cannot sell their property and because of this they are therefore forced to lease out their property as a landlord by consequence; if supports are available to offset rental income against mortgage paid to date. [47914/14]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that, irrespective of whether or not a property is in negative equity, rental income from the property is taxable. The taxable amount is the gross rent less allowable expenses incurred in earning that rent, as specified in section 97(2) of the Taxes Consolidation Act (TCA) 1997. The main deductible expenses are:

- any rent payable by the landlord in the case of a sub-lease;

- the cost to the landlord of any goods provided or services rendered to a tenant;

- the cost of maintenance, repairs, insurance and management of the property;

- the interest on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and

- payment of local authority rates.

In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.

The effect of the deduction of allowable expenses from gross rent means that the amount of taxable rental income will often be substantially lower than the gross rent, and could, depending on individual circumstances, be nil.

In relation to interest on borrowings, section 105 of the TCA 1997 provides that a deduction is not due for interest payable in respect of a period prior to the first letting of a property. This means that no deduction would be allowable against rental income in respect of mortgage payments (whether interest or capital) made before the property was let.