How will I be taxed on Dubai property income?
Q I am an Irish resident who has been living in Dubai for almost 10 years. I own several properties in Dubai.
I plan to return to Ireland to live. My income will be drawn from rental income on my Dubai properties. I will also have a lump of savings that I may access.
Will I be taxed on my savings? Will I be taxed on my Dubai rental income? If so at what rate?
AForeign tax issues need professional advice so we put your query to Colm Murphy of Dublin-based Property Tax International (www.ptireturns.com ). The most notable advantage of the buy-to-let market in Dubai is the zero income tax rate on income received. Murphy says that as an Irish resident you are obliged to declare all income received outside the State as worldwide income in your annual tax return. As there are no tax administration offices, no tax returns due and no tax rate in Dubai you will be taxed on the full rental income received here in Ireland. But Revenue does allow for costs associated with maintaining and running the property. Costs such as property management fees, furnishing and fittings, insurance and so on can be deducted to determine taxable income.
Flights to Dubai are not allowable as a cost deduction. You will be taxed at 20 per cent on income up to €35,400 assuming you are single. Income above this is taxed at 41 per cent. Your tax-free allowance of €1,830 ensures that you can earn up to €9,150 tax-free.
Assuming that your savings are a result of employment income and not from the sale of an asset, then no tax is payable on savings brought back into the State. Your residence status for tax purposes is determined by the number of days you are in the State in a tax year. You will be resident in Ireland for a tax year in either of the following circumstances: if you spend 183 days or more in Ireland in any given year, or if you spend 280 days or more in Ireland over two years. Seek professional advice.
Is the apartment parking space worth the money?
Q Any advice on parking spaces in an apartment block? I am shopping around for an apartment - access to public transport is key for me as I work in Dublin city centre and have no parking space in work. I viewed one this weekend where the car park space is an extra €25,000. Is it worth it? It seems pointless to add that extra to the loan when I don't have a car, don't plan on needing one, and there are several guest parking spaces I could use if I needed to.
A If at all possible, you should buy a parking space. It will help when you come to sell on your home or let it. At that price, it's likely that the apartment is not very close to the city centre and, while buyers don't automatically expect a car space in the city, they do in suburbia. There are usually only a handful of guest parking spots in a development and most management companies police them to make sure they are not being used by residents as everyday parking. As many couples have two cars and only one car park space you could find that you can rent out your space to another resident.
Your questions
Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. Unfortunately it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
