Terence Flanagan (Dublin North East, Independent)
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282. To ask the Minister for Finance his views on correspondence (details supplied) regarding rental income; and if he will make a statement on the matter. [18313/15]

Michael Noonan (Limerick City, Fine Gael)
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The details supplied with this question suggest that gross rental income from lettings is taxed rather than the profits arising from the lettings. This is not the case.

In that regard, I am informed by the Revenue Commissioners that rental income for tax purposes is the gross rental income less allowable expenses incurred in earning that rent, as specified in section 97(2) of the Taxes Consolidation Act 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 Private Residential Tenancies Board registration requirements for all tenancies that existed in relation to the property in the relevant year); and

- the 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.