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Landlord not declaring his income?

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  • 14-09-2010 10:12pm
    #1
    doudou
    Closed Accounts Posts: 4 ✭


    Hi I have been renting the place from a guy who lives abroad. He doesnt claim the income here and droped the rent when i found out that I am not entitle for a tax relief.
    However I become unemployed recently and went to apply for my benefit, they start to ask me questions about my accommdation etc.
    I need to show them my utility bills and bank statement and gave them my address. Does that info goes somewhere i dont want to be in trouble or put him into any trouble. I read somewhere that the tenant has to pay 20%tax himself? why?

    Please help


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    #2
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    Since the landlord lives overseas, then you (the tenant) should keep 20% to pay in tax and declare it. If you don't, then you are at fault, and may be liable for any penalty.

    Your landlord's affairs shouldn't be of concern to you.

    You should still show your utility bills and give your correct address. But, you better make sure that you have the money saved to pay the 20% tax that's been due since you moved in.


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    #3
    goat2
    Registered Users Posts: 4,939 ✭✭✭goat2


    Paulw wrote: »
    Since the landlord lives overseas, then you (the tenant) should keep 20% to pay in tax and declare it. If you don't, then you are at fault, and may be liable for any penalty.

    Your landlord's affairs shouldn't be of concern to you.

    You should still show your utility bills and give your correct address. But, you better make sure that you have the money saved to pay the 20% tax that's been due since you moved in.

    i do not think you should be bothered whether your landlord is caught or not, i bet he put no money in your hand since you yourself are not earning anymore, so like the rest of us this landlord should pay his share


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    #4
    Cookie_Monster
    Registered Users Posts: 24,499 ✭✭✭✭Cookie_Monster


    Paulw wrote: »
    Your landlord's affairs shouldn't be of concern to you.

    if there is any potential for tax evasion or any other illegal activity that may end up affecting you then of course you should be concerned


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    #5
    doudou
    Closed Accounts Posts: 4 ✭doudou


    Hi

    I cannot believe it, I pay same rent as the guy beside but his landlord lives here. If I knew that I have to pay tax I would never sign that lease? Its is an extra 2600 a year? What an idiot would go for that lease?
    Why I wasn't told about it? I think this is not right?

    There is no justice here.
    Thanks for it help


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    #6
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    No, you don't pay extra. You are supposed to withhold 20% of the rent as tax and pay that money to the govt. You should be paying the exact same amount, but 80% to landlord and 20% held as tax.

    Your landlord should be aware of this.

    If you have questions, you should consult Threshold.


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    #7
    doudou
    Closed Accounts Posts: 4 ✭doudou


    I pay all my rent to the landlord ;-( he did not say anything to me!
    He said not to give this address anywhere that's all.


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    #8
    variety
    Registered Users Posts: 152 ✭✭variety


    doudou wrote: »
    Its is an extra 2600 a year?

    No, it's not.
    From your figures, it would seem you're paying about €1,080 a month? If so, then you should be paying the LL €864 per month and paying Revenue €216 per month, so you still end up paying the same amount in rent.


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    #9
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    doudou wrote: »
    I pay all my rent to the landlord ;-( he did not say anything to me!
    He said not to give this address anywhere that's all.

    If that is the case, then you are legally liable, even for back tax since your tenancy began.

    You really should talk to Threshold, and get proper professional advice.

    You should also check with the PRTB that your tenancy is registered. This is a legal requirement, and is there to protect you and also your landlord.

    Since you are now unemployed, and need to fill in all the forms, you are obviously in a very dangerous position. You really need professional advice.


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    #10
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Hang on a second, how is the tenant liable for income tax that their landlord is not paying? I have no idea if my landlord is paying tax on the apartment, and quite frankly its none of my business to ask them. How on earth can someone be responsible for tax that someone else is not paying?


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    #11
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    djimi wrote: »
    Hang on a second, how is the tenant liable for income tax that their landlord is not paying? I have no idea if my landlord is paying tax on the apartment, and quite frankly its none of my business to ask them. How on earth can someone be responsible for tax that someone else is not paying?

    It's the law. Simple as that.

    If your landlord is not a resident within the country, then the tenant has the responsibility to withhold 20% of the rent, as tax, and this has to be paid/declared to the Revenue.

    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-and-corporation-tax/part-45/45-01-04.pdf


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    #12
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Hmmm Id better give that a read; as far as I know my landlord lives in the States...


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    #13
    Da GOAT
    Registered Users Posts: 453 ✭✭Da GOAT


    maybe im wrong but is it not 25% tax? tax on rental income is 25%.


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    #14
    Cookie_Monster
    Registered Users Posts: 24,499 ✭✭✭✭Cookie_Monster


    doudou wrote: »
    Hi

    I cannot believe it, I pay same rent as the guy beside but his landlord lives here. If I knew that I have to pay tax I would never sign that lease? Its is an extra 2600 a year? What an idiot would go for that lease?
    Why I wasn't told about it? I think this is not right?

    There is no justice here.
    Thanks for it help

    regardless of the tax issue the rent you pay is between you and the landlord. If someone else managed to negotiate a better deal then fair play to them. There is no fixed rental amount, everyone sets and haggles a price in the end


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    #15
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    Da GOAT wrote: »
    maybe im wrong but is it not 25% tax? tax on rental income is 25%.

    Actually, you could be right.


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    #16
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Paulw wrote: »
    It's the law. Simple as that.

    If your landlord is not a resident within the country, then the tenant has the responsibility to withhold 20% of the rent, as tax, and this has to be paid/declared to the Revenue.

    http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-and-corporation-tax/part-45/45-01-04.pdf

    Im going to be checking this out with the letting agent (we only moved in yesterday) but the situation is that we have rented the apartment from a letting agent who is acting on behalf of our landlords who I believe live in the States. Is it the norm in situations like this that we would have to sort this out ourselves, or would the letting agent usually sort out this kind of thing? Ill be honest, Im not over the moon at the prospect of having to sort my landlords taxes; as far as Im concerned thats their business and not mine, but if thats the law then I suppose I have to do it.


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    #17
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    I am no expert, so please talk to Threshold.

    But, my understanding, from reading the information available, is that if you pay a letting agent, then that letting agent is responsible for withholding the tax, and paying the landlord.


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    #18
    mathepac
    Banned (with Prison Access) Posts: 4,991 ✭✭✭mathepac


    An agent collecting rents on behalf of a non-resident landlord is obliged by Revenue to deduct 20% of the rent and return this directly to the Revenue - the agents must register and get special PPSNs for this.

    Tenants paying rents to non-resident landlords or into bank accounts on their behalf have to deduct 20% of the rent and remit it to Revenue.

    "maybe im wrong but is it not 25% tax? tax on rental income is 25%."

    AFAIK the "witholding tax" is still 20%, the actual tax a landlord pays on rental income after deductions is between the landlord and Revenue.


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    #19
    LittleBook
    Closed Accounts Posts: 1,716 ✭✭✭LittleBook


    doudou wrote: »
    Hi I have been renting the place from a guy who lives abroad. He doesnt claim the income here and droped the rent when i found out that I am not entitle for a tax relief.

    I pay all my rent to the landlord ;-( he did not say anything to me!
    He said not to give this address anywhere that's all.

    I cannot believe it, I pay same rent as the guy beside but his landlord lives here. If I knew that I have to pay tax I would never sign that lease? Its is an extra 2600 a year? What an idiot would go for that lease?

    Why I wasn't told about it? I think this is not right?
    Paulw wrote: »
    No, you don't pay extra. You are supposed to withhold 20% of the rent as tax and pay that money to the govt. You should be paying the exact same amount, but 80% to landlord and 20% held as tax.

    Your landlord should be aware of this.
    variety wrote: »
    No, it's not.
    From your figures, it would seem you're paying about €1,080 a month? If so, then you should be paying the LL €864 per month and paying Revenue €216 per month, so you still end up paying the same amount in rent.

    Hmm, I suspect that the OP is referring to amounts he/she's already paid to the landlord without deducting the tax.


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    #20
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    LittleBook wrote: »
    Hmm, I suspect that the OP is referring to amounts he/she's already paid to the landlord without deducting the tax.

    In that case, the OP should probably not pay the landlord anything until he has withheld the correct amount of money due in back tax, that should have been withheld. That may take a few months though.


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    #21
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Cheers for that Paul. Im not sure who we pay the rent to yet, so Ill have to get onto the letting agent about it.


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    #22
    bryaner
    Registered Users Posts: 3,181 ✭✭✭bryaner


    Is the landlord liable for tax on his rental income if he has a mortgage on
    the property and he is not making profit on the rental income?


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    #23
    mathepac
    Banned (with Prison Access) Posts: 4,991 ✭✭✭mathepac


    bryaner wrote: »
    Is the landlord liable for tax on his rental income if he has a mortgage on
    the property and he is not making profit on the rental income?
    and the relevance of your question to the current thread is ... ?


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    #24
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    bryaner wrote: »
    Is the landlord liable for tax on his rental income if he has a mortgage on
    the property and he is not making profit on the rental income?

    Income is income; what you choose to spend it on is your own business.


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    #25
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    bryaner wrote: »
    Is the landlord liable for tax on his rental income if he has a mortgage on
    the property and he is not making profit on the rental income?

    If the owner is not resident in the building, then they must declare the income. Depending on how much rent is being charged, they may not be liable for tax, but it still must be declared.


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    #26
    bryaner
    Registered Users Posts: 3,181 ✭✭✭bryaner


    doudou wrote: »
    Hi I have been renting the place from a guy who lives abroad. He doesnt claim the income here and droped the rent when i found out that I am not entitle for a tax relief.
    However I become unemployed recently and went to apply for my benefit, they start to ask me questions about my accommdation etc.
    I need to show them my utility bills and bank statement and gave them my address. Does that info goes somewhere i dont want to be in trouble or put him into any trouble. I read somewhere that the tenant has to pay 20%tax himself? why?

    Please help
    mathepac wrote: »
    and the relevance of your question to the current thread is ... ?

    Read above


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    #27
    doudou
    Closed Accounts Posts: 4 ✭doudou


    Guys, thanks for ur help and comments
    Have no idea if he has a mortgage on it or not ;-/ never asked really, thought its not my problem...
    Looks like i am in a trouble, no job and probably no place to live soon. Cant apply for Social as well until have things sorted.
    I wasnt aware of that and to be honest I didnt care why he wasnt claiming that until i found out about tax reliefs etc. But now if i can be trouble as well for owning money to revenue i need to get this thing sorted asap.
    It is so hard to get a nice place these days that i was over the moon with this lovely app ;-(
    I ve never checked any info and i should ;-(
    Thanks again


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    #28
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    You really should contact Threshold. They can give you all the advice you need. They can help with your situation.


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    #29
    Tigger
    Closed Accounts Posts: 16,705 ✭✭✭✭Tigger


    doudou wrote: »
    Hi I have been renting the place from a guy who lives abroad. He doesnt claim the income here and droped the rent when i found out that I am not entitle for a tax relief.

    This bit makes me think that you were fine with his tax evasion till you wanted something off the state. It's corny but if you brawl the rules you take the hit


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    #30
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Tigger wrote: »
    doudou wrote: »
    Hi I have been renting the place from a guy who lives abroad. He doesnt claim the income here and droped the rent when i found out that I am not entitle for a tax relief.

    This bit makes me think that you were fine with his tax evasion till you wanted something off the state. It's corny but if you brawl the rules you take the hit

    No necessarily. I didnt know about any of this until I read this thread. Until now my attitude was I pay my money and what the LL does with it is their business and not mine. I would never get involved in someone elses financial affairs, regardless of what they are or are not doing. Bit harsh on the OP tbf.


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    #31
    Tigger
    Closed Accounts Posts: 16,705 ✭✭✭✭Tigger


    djimi wrote: »
    No necessarily. I didnt know about any of this until I read this thread. Until now my attitude was I pay my money and what the LL does with it is their business and not mine. I would never get involved in someone elses financial affairs, regardless of what they are or are not doing. Bit harsh on the OP tbf.

    he dropped the rent when yer man said he wasn't claiming tax relief
    i doubt that that happend with no discussion

    he knew the guy was not declaring the tax its in the title

    if you pay a person and get a discount because they dont pay tax on it be it labour goods or in this case services then think you are due money from the state i have no sympathy

    i got a call yesterday where after giving a client a quote he asked for a discount for cash
    i told him i put everything throught the books and he said that he understood that i couldnt talk about that on the phone but that he didn't want to pay tax

    i told him that i think that anyone who cash jobs ex vat should be jailed as they are stealing

    the state exists through give and take and when that likes of me leaves to kwwork in a honest there will be no small business left just cowboys tax dodgers and the americians


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