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Sick with worry - I'm a non-resident landlord - need advice

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2

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    #32
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    You need to hire an agent,and an accountant, fairly soon
    but if your mortgage is say,15k, annual rental income is 12k, I do,nt think you,ll have a major problem with the revenue.


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    #33
    carpejugulum
    Registered Users Posts: 523 ✭✭✭carpejugulum


    Lillyskye wrote: »
    My tenants don't know I'm non-resident. I didn't realise that there were implications for them.

    Will definitely try come home in the next month or so and clean all this up.

    Might try tell tax office I'm leaving Ireland now and see what happens?

    Good to know I won't lose the tracker...fingers crossed.
    The worst thing you can do is continue lying to them. Your tenants might have already claimed rent tax credits, so the Revenue may already know about you.
    You should seek legal advice.


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    #34
    Grolschevik
    Registered Users Posts: 3,472 ✭✭✭Grolschevik


    riclad wrote: »
    You need to hire an agent,and an accountant, fairly soon
    but if your mortgage is say,15k, annual rental income is 12k, I do,nt think you,ll have a major problem with the revenue.

    [Copy from another thread]:

    Riclad,

    It's pretty hard to tell, because for whatever reason, your posts are borderline indecipherable, but I'm pretty sure that your interpretation of the taxation of rental income is completely wrong.


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    #35
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    Yeah ,so i,m advising OP, to employ a professional accountant,and do what he says .
    I Happen to know 2 btl landlords, and they were in exactly same situation,ie living abroad, unregistered with revenue, not registered with prtb.
    They eventually sorted everything out, got agent,etc and registered with revenue ,And paid whatever taxes were due .Without getting fined ,
    or getting into some financial crisis.
    They were not bullied or threatened by revenue in any way.

    I,M not pretending to be some sort of financial genius or legal expert.

    I just told em,fill in forms, get accountant ,get agent , register as an overseas landlord,
    And that was it.


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    #36
    I carried a watermelon
    Registered Users Posts: 85 ✭✭I carried a watermelon


    Be aware that you cannot claim TRS on this property as it is no longer principal private residence. When you submit your tax returns for previous years declaring your rental income and claiming the 75% mortgage interest relief deduction, the TRS granted in previous years will be clawed back.
    Afaik USC is due on the gross rent minus mortgage interest relief but before any other expenses.


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    #37
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    I carried a watermelon wrote: »
    Afaik USC is due on the gross rent minus mortgage interest relief but before any other expenses.
    USC is due after allowances but before capital allowances, so normal maintenance expenses are deducted before computing USC.

    People who use certain tax shelters like s.23 etc. will have to pay USC on income they otherwise wouldn't have, but people who don't avail of these schemes will basically pay USC on the same amount that they pay income tax.

    :)


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    #38
    enniser
    Registered Users Posts: 15 ✭enniser


    3DataModem wrote: »
    I will tell you the same thing I have told plenty of others here.

    I have yet to hear of a SINGLE confirmed case where a bank forced a mortgage holder off a tracker due to renting out their former PPR.

    Rumours, conjecture, but not a single confirmed case.

    Im just wondering where in the terms and conditions of the mortgage should you find the stipulation that the property has to be the PPR. Im considering renting out my house and just want to see if we would lose our tracker also. Ive read the loan offer letter and the any other letters we had from the bank when we bought the house and cant find anything like that, should it be under any particular heading? Thanks.


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    #39
    siralan
    Registered Users Posts: 80 ✭✭siralan


    If the NPPR still applies for this year then should it not only apply for the first 6 months of the year? My mum has only one house but actually lives in a house owned by myself and my brother. An accountant has told her that she should have been paying the NPPR for past 4 years on her own house which is rented out and that with arrears she owes over €3,000. Needless to say, she is distraught . She is semi retired and not a wealthy woman. We had assumed previously that because she only owns one house she should not face this "Second home" tax.
    Has anyone any experience of this or advice ? If she didnt pay, could she claim in future years that she did live in the property during the NPPR years and only had a couple of rooms rented out to lodgers?


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    #40
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    Sorry but the accountant is correct unless she is living with you due to ill health and is unable to look after herself. It is a very punative law


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    #41
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    siralan wrote: »
    If the NPPR still applies for this year then should it not only apply for the first 6 months of the year?

    No, this year is a double taxation year. NPPR + 6 months property tax. NPPR abolished at the end of the year but arrears will be carried forward and interest (punative interest at €20 per month per year) will continue to accrue.


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    #42
    Merch
    Closed Accounts Posts: 3,327 ✭✭✭Merch


    Pawwed Rig wrote: »
    Your tenants are ultimately liable for the tax as your sisters are for the tax before then. However who is currently collecting the rent? Where is the rent paid to?
    Also consider if you are claiming mortgage interest relief on the mortgage.

    If you pay the back tax you may be liable to interest and penalties but they shouldn't be too much.
    Bear in mind there are alot of things you can write off against rental income such as your mortgage interest * 75%, 12.5% of the cost of the furnishings per annum etc etc

    You should be aware of the NPPR. If you have never paid it then the penalties can be alot. It costs €200 per year but for every month you are over due costs €20 (€240 per year). So if you are 3 years over due the penalties are currently accruing at €60 per month.

    Also you should have paid the household charge and registered each tenancy with the PRTB.

    Should they be aware of that? they are not resident in Ireland, is that not like applying a law here to someone resident in another jurisdiction, if its the case, then a lot of people will have some nasty suprises in store, assuming they are discovered.


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    #43
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Merch wrote: »
    Should they be aware of that? they are not resident in Ireland, is that not like applying a law here to someone resident in another jurisdiction, if its the case, then a lot of people will have some nasty suprises in store, assuming they are discovered.

    Revenue see letting property as a business. You are responsible for making sure you are compliant with all laws, fees and taxes associated with that business. Whether you live next door or on the other side of the world, you are still responsible, the business is still in Ireland.


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    #44
    Merch
    Closed Accounts Posts: 3,327 ✭✭✭Merch


    athtrasna wrote: »
    Revenue see letting property as a business. You are responsible for making sure you are compliant with all laws, fees and taxes associated with that business. Whether you live next door or on the other side of the world, you are still responsible, the business is still in Ireland.

    The charges and the penalties look steep, its easy to see how they'd rack up,
    It looks like loan shark rates :eek:. (edit, maybe Im incorrect, I just looked at a table of charges, Im not sure I read it right, it still looks steep)
    Is the NPPR just a charge? or is there any suggestion it pays for some service?

    OP, there would also be the PRTB and Im not sure if there are charges or penalties for that? but there is certainly a fine if caught, assuming they ever process stuff like that, not that Im trying to put added worry on you, I agree you need professional advice but, the thing is, they will likely be obliged to tell you what you must do to comply with your legal obligations throughout all the years.

    Worst case, Id suggest you start from fresh. (Id still get advice)


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    #45
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    Merch wrote: »
    The charges and the penalties look steep, its easy to see how they'd rack up,
    It looks like loan shark rates :eek:. (edit, maybe Im incorrect, I just looked at a table of charges, Im not sure I read it right, it still looks steep)
    Is the NPPR just a charge? or is there any suggestion it pays for some service?

    You probably read it right. A €200 charge from say 4 years ago will now cost you €200 + (48x20). Then the charge that would have been due 3 years ago will cost you €200 + (36x20) etc etc
    It is supposedly a local authority charge similar to rates that business pay although Revenue challenge this and it is not deductible for some reason.


    [/QUOTE]OP, there would also be the PRTB and Im not sure if there are charges or penalties for that? [/QUOTE] There is a double payment if not registered within a month and then mortgage interest is disallowed as a deduction.


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    #46
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Merch wrote: »
    The charges and the penalties look steep, its easy to see how they'd rack up,
    It looks like loan shark rates :eek:. (edit, maybe Im incorrect, I just looked at a table of charges, Im not sure I read it right, it still looks steep)

    The whole idea is to encourage people to be compliant. It's a lot cheaper that way ;)


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    #47
    Merch
    Closed Accounts Posts: 3,327 ✭✭✭Merch


    athtrasna wrote: »
    The whole idea is to encourage people to be compliant. It's a lot cheaper that way ;)

    cheaper? to enforce you mean?
    I wonder will they do the same with any taxes on homeowners? what if they cant pay, stack it up like that and people will "legally" have their home compulsorily purchased back off them to pay off their accrued penalties.


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    #48
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    It's cheaper for a landlord to comply from Day 1 rather than evade and get caught.


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    #49
    Merch
    Closed Accounts Posts: 3,327 ✭✭✭Merch


    athtrasna wrote: »
    It's cheaper for a landlord to comply from Day 1 rather than evade and get caught.

    It looks like that


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    #50
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    athtrasna wrote: »
    It's cheaper for a landlord to comply from Day 1 rather than evade and get caught.

    It was a political decision more than anything else. You might ask why the household charge did not have similar penalties or why commercial rates don't have similar penalties. Landlords are an easy target.


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    #51
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Pawwed Rig wrote: »
    It was a political decision more than anything else. You might ask why the household charge did not have similar penalties or why commercial rates don't have similar penalties. Landlords are an easy target.

    It's a domino charge. Bearing in mind there are a series of charges & taxes a landlord is supposed to pay, having a register of rented properties makes it easier to enforce PRTB registration and income tax.


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    #52
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    Same point could be made about the household charge and commercial rates.
    Any charge that could potentially bankrupt someone who may not be aware of it does not belong on the statute books of a civilised country.


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    #53
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Pawwed Rig wrote: »
    Same point could be made about the household charge and commercial rates.
    Any charge that could potentially bankrupt someone who may not be aware of it does not belong on the statute books of a civilised country.

    Ignorance is no excuse. The law states that these charges must be paid, anybody who thinks they can just rent out their property and collect the rent without paying taxes and charges is misguided. Resources like irishlandlord.com are freely available to help people educate themselves on their obligations.


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    #54
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    I am aware what the law says but that does not make it good law.


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    #55
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Pawwed Rig wrote: »
    I am aware what the law says but that does not make it good law.

    Some people will agree, others won't. The charge is being abolished so it's a pretty moot point.

    I should state here that we have a rented property and are fully compliant with all taxes and charges. We never set out to become landlords and have learned on our feet that it really does pay to educate yourself on obligations & responsibilities.


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    #56
    Merch
    Closed Accounts Posts: 3,327 ✭✭✭Merch


    athtrasna wrote: »
    Some people will agree, others won't. The charge is being abolished so it's a pretty moot point.

    I should state here that we have a rented property and are fully compliant with all taxes and charges. We never set out to become landlords and have learned on our feet that it really does pay to educate yourself on obligations & responsibilities.

    Its being abolished? I havent heard of this, I looked up the Citizens advice and cant see mention of that, what are they replacing it with?
    Is it the property tax? they must keep these things quiet.

    Does that mean the OP could, quietly brush it all under the carpet or will they still be looking for it, if they dont seek it out, it undermines anyone that paid or anyone that would consider paying similar in the future.
    Ha fcuk me, I just looked it up, I dont know whether to lol or not, people that pay the NPPR in 2013 are also required to pay the LPT too? my God, so if you avoided the nppr you were probably doing the right thing?


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    #57
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    athtrasna wrote: »

    Revenue see letting property as a business.
    Pity they don't allow landlords to deduct ALL their business expenses then. Why is mortgage interest relief capped at 75%? Why is the NPPR and HH Charge not allowed as an expense?


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    #58
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Merch wrote: »

    Its being abolished? I havent heard of this, I looked up the Citizens advice and cant see mention of that, what are they replacing it with?
    Is it the property tax? they must keep these things quiet.

    Does that mean the OP could, quietly brush it all under the carpet or will they still be looking for it, if they dont seek it out, it undermines anyone that paid or anyone that would consider paying similar in the future.
    Ha fcuk me, I just looked it up, I dont know whether to lol or not, people that pay the NPPR in 2013 are also required to pay the LPT too? my God, so if you avoided the nppr you were probably doing the right thing?
    No. The oustanding NPPR remains, with penalties accruing as a charge on the house. The sale of the house cannot be completed until these have been paid.


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    #59
    carpejugulum
    Registered Users Posts: 523 ✭✭✭carpejugulum


    murphaph wrote: »
    Pity they don't allow landlords to deduct ALL their business expenses then. Why is mortgage interest relief capped at 75%? Why is the NPPR and HH Charge not allowed as an expense?
    Because it's an asset you can monetize or start using privately.


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    #60
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    carpejugulum wrote: »
    Because it's an asset you can monetize or start using privately.
    So?

    That could apply to many business assets. Company vehicles are the obvious example. In Germany you can deduct the full mortgage interest and also any taxes and charges that aren't passed on to the tenant outside of the rent. Why would the German Finanzamt have a different take on this than Revenue? It's because landlords are politically an easy target in Ireland.


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    #61
    carpejugulum
    Registered Users Posts: 523 ✭✭✭carpejugulum


    murphaph wrote: »
    So?

    That could apply to many business assets. Company vehicles are the obvious example.
    You cannot freely take a company asset.
    murphaph wrote: »
    In Germany you can deduct the full mortgage interest and also any taxes and charges that aren't passed on to the tenant outside of the rent. Why would the German Finanzamt have a different take on this than Revenue? It's because landlords are politically an easy target in Ireland.
    The rental market in Germany is much more developed and professional.


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