Q&A looks at rental income from properties abroad and explains an offset mortgage.

Rental income from France

I am receiving rental income from a property in France. As I am subject to tax on the income, I am anxious to complete the necessary returns. I am aware that I need to complete a Declaration des Revenus (Certa form number 2042), however I do not know where I can obtain this form and the address to submit my return. I do not speak French and I have looked up a number of websites with no success hoping to find the information I require. Perhaps you can let me know if there is anywhere in Ireland I can contact for this information.

As you've been through the process of buying in France, you'll know that there's nothing the French like more than a bit of bureaucracy. As you don't speak French, you really do run the risk of either filing incorrectly or not taking full advantage of any allowable deductions. Noel Cunningham of financial services firm, Mazars, advises property investors to get professional advice from a local French accountancy firm. It should cost you somewhere between €350 and €500 to get them to file your returns for you - which is a small price to pay for the peace of mind that brings.

Cunningham points out that there is likely to be changes every year in your allowable deductions, depreciation, etc, so that even people relatively proficient in French can have difficulties keeping up. You may find that after a year or two of seeing how a professional files your returns that you are able to do it yourself but, until then, it's worth paying for professional advice - as an investor that advice is likely to be tax deductible.

What's an offset mortgage?

What is an offset mortgage? A friend advised that we look into it but, when we asked our current lender, AIB, they said that they don't offer such a product and that we should think carefully before moving our mortgage.

Well, yes, of course you should think carefully before you make any financial decision - but with the number of mortgage products and options available in the market it is wise to be alert to the possibility that one of them just might be a better option for you. An offset mortgage is a new mortgage type offered by National Irish Bank (NIB) and First Active. There are some small differences between the products offered by the two banks but they essentially are the same.

Basically an offset mortgage allows borrowers to use money they have in a current or savings account to reduce the amount of interest they must pay on the mortgage. If a borrower has a mortgage of €200,00, a balance of €10,000 in a savings account and €2,000 in a current account, they only pay interest on €188,000 of the mortgage.

As you can see this mortgage really depends on your having some savings or large sums of cash in the bank at any one time.

Anecdotally, one hears of offset mortgages being particularly attractive to self-employed people who must save for annual taxes. It all depends on your own circumstances, but shop around and compare how the various products work out for you.

Send your queries to Property Questions, The Irish Times, 10-16 D'Olier Street, Dublin 2 or e-mail 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.