Landlords claiming back on furniture and other assets

Q: I am a landlord and have replaced furniture to the value of €5,000 in my rented accommodation recently, at the request of my tenants. How can I claim this back on my tax return, can I claim it all in year one?

21st August 2015

A: When you purchase items with a life that extends beyond one year, such as furniture they are treated as capital expenditure. You are not allowed deduct the entire amount of your purchase in the first year. Instead the deduction against your rental profit for this capital expenditure is taken over a period of 8 years (12.5% per year).

In this case you will deduct €625 in year one, if the property was let for the full tax year. If the property was not let for the full tax year, for example the first letting, the capital allowances are restricted to the number of months during which the property was let. If you were to dispose of an asset purchased for your rented accommodation before the 8 years have passed, you may be allowed claim an additional allowance at this point depending on much you sold the item for. It is therefore crucial that you keep a detailed list of items purchased, the amount and date of purchase, to ensure you claim all that you are entitled to.

What is and what is not deemed capital allowances can be quite a grey area with Revenue, so it is crucial that you seek tax advice on the topic from your accountant.

Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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Or submit an enquiry