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Leasing Property to Local Authority

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  • 11-11-2015 11:24am
    #1
    pajoguy
    Registered Users Posts: 825 ✭✭✭


    I am think of leasing a property to the Local Authority. There are two options.
    1. Long Term Lease 10-20 years
    2. Availibilty Arrangements.

    Rent is guaranteed for both options but was more interested in option 1.
    You get 80% market rent and local authority does the maintenance.
    however the local authority registers with the PRTB not me so according to revenue we cant write off the mortgage interest on our tax return.
    Considering this would be 100% of the mortgage interest after yesterdays announcements this would increase our tax bill by about €4000 per annum.

    Option 2 you get 92% market rent but you maintain responsibility as landlord, maintenance etc and register with PRTB therefore being able to write off the mortgage interest.

    was hoping to get rid of headaches for ten years with option 1 but not keen on have an extra 4000 to pay in tax.

    Has anybody experience in this and was the person i spoke to in revenue correct?


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    #2
    TRS30
    Registered Users Posts: 6,865 ✭✭✭TRS30


    pajoguy wrote: »
    however the local authority registers with the PRTB not me so according to revenue we cant write off the mortgage interest on our tax return.
    Considering this would be 100% of the mortgage interest after yesterdays announcements this would increase our tax bill by about €4000 per annum.

    Really! I have looked into the LTL and got paper work etc from the council and havent seen this written anywhere. Why would anyone lease to the council on LTL if you cannot write off the interest??


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    #3
    pajoguy
    Registered Users Posts: 825 ✭✭✭pajoguy


    TRS30 wrote: »
    Really! I have looked into the LTL and got paper work etc from the council and havent seen this written anywhere. Why would anyone lease to the council on LTL if you cannot write off the interest??

    The LTL states that you dont register with the PRTB the council does. Revenue state that to write off interest the tenancy must be registered with the prtb. Maybe once a tenancy is registered you could get a letter from local authority.


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    #4
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    pajoguy wrote: »
    The LTL states that you dont register with the PRTB the council does. Revenue state that to write off interest the tenancy must be registered with the prtb. Maybe once a tenancy is registered you could get a letter from local authority.
    If it is not a letting which requires registration then the revenue cannot refuse tax relief.


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    #5
    TRS30
    Registered Users Posts: 6,865 ✭✭✭TRS30


    pajoguy wrote: »
    The LTL states that you dont register with the PRTB the council does. Revenue state that to write off interest the tenancy must be registered with the prtb. Maybe once a tenancy is registered you could get a letter from local authority.

    I asked this questions over on askaboutmoney.com and the requirement seems to be that the property has to be registered to comply. So i guess it doesn't matter who registers it once it's done.
    4ensic15 wrote: »
    If it is not a letting which requires registration then the revenue cannot refuse tax relief.

    Too many negatives in that sentence for so early in the morning!!!


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    #6
    pajoguy
    Registered Users Posts: 825 ✭✭✭pajoguy


    TRS30 wrote: »
    I asked this questions over on askaboutmoney.com and the requirement seems to be that the property has to be registered to comply. So i guess it doesn't matter who registers it once it's done.



    Too many negatives in that sentence for so early in the morning!!!



    Thanks for that. It did seem crazy if you couldnt write it off as they would get no properties. Suppose revenue check the address with prtb and will be giving 100% interest write off which is a good incentive.


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    #7
    All in all
    Registered Users Posts: 434 ✭✭All in all


    When you lease to Local authority is there any increase in rent over the 10 year period?


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    #8
    Gumbo
    Moderators, Society & Culture Moderators Posts: 39,416 Mod ✭✭✭✭Gumbo


    All in all wrote: »
    When you lease to Local authority is there any increase in rent over the 10 year period?

    They can review it up or down every 2 years I believe.


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    #9
    TRS30
    Registered Users Posts: 6,865 ✭✭✭TRS30


    pajoguy wrote: »
    Thanks for that. It did seem crazy if you couldnt write it off as they would get no properties. Suppose revenue check the address with prtb and will be giving 100% interest write off which is a good incentive.

    I wouldn't take it as gospel and best to check with a tax account etc however i will be writing off the mortgage interest and challenge revenue if they try to say I can't. Will get a letter from the council saying property is registered.
    All in all wrote: »
    When you lease to Local authority is there any increase in rent over the 10 year period?

    I think the rent is reviewed every 4 years however dont have the paperwork to hand so would have to check.


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