Non resident landlords - changes 1 July 2023

DFB-D

https://www.revenue.ie/en/property/rental-income/non-resident-landlords/changes-from-1-July-2023.aspx

Just as a FYI.

Basically tenants and agents will be required to withhold and pay 20% from each payment through the new platform noted in the link (previously done annually though the tenants income tax return).

The requirement to complete an income tax return for the withheld amounts is removed.

DownByTheGarden

https://www.boards.ie/discussion/2058298338/non-resident-landlords-changes-1-july-2023

I always wondered what happens if the tenant holds 20% but then doesnt pay it. Has this ever happened and what would really happen. My bet is that there is some law but at the end of the day the tenant will keep the money and the landlord will end up paying the tax out of their own pocket anyway.

DFB-D

I'm sure it has happened, hence the new system!

Under the existing system, Revenue allowed the tenant to pay when completing a tax return for the year (but the rule is generally pay when received for WHT).

The landlord claims the WHT as a credit so possibly Revenue are doing preparation to start chasing amounts owed by tenants based off non resident landlords returns.

The relevant legislation are the taxes consolidation acts.

arctictree

I'd love to know the compliance rates on this. I mean how is a renter supposed to know where their landlord lives and to withhold this tax and give to revenue.

tonyfillony

https://www.boards.ie/discussion/comment/120658146#Comment_120658146

I have thought about this as well .If I'm paying into an Irish bank account and have never met the landlord , how am I supposed to know where they live??

DFB-D

1.2 Residential property lettings

Tenants renting a residential property may not be aware of their obligation to deduct tax from payments to a non-Irish resident landlord.

This can occur either because the tenants are unaware that the landlord is resident abroad or because they are unaware of the obligation to deduct tax when making payment to such a landlord. Once the tenant becomes aware of this obligation, s/he should deduct tax from all future payments to the landlord unless and until the landlord appoints an Irish resident “collection agent”.

An assessment can be entered on the landlord, at his or her foreign address, and where necessary powers of attachment under section 1002 TCA can be used to enforce collection of any balance of tax due.

The landlord also should limit their claim for credits based on deductions they know to have been made/should have been made.

So both parties are responsible in a way for ensuring the system is applied but it would be more helpful for the RTA to have a section requiring disclosure to the tenant.

But if you pay into a foreign bank account, this may be a sign that the landlord is non res (not always but mostly true), you should query with the landlord..

Don't forget if you pay rent through an agent, the tenant is not required to make deductions.

arctictree

I am kind of thinking about students, transient workers etc. How are they supposed to know about this? They just pay their rent and thats it. A lot of them wouldnt even do tax returns.

I mean, I'm no tax expert but it seems highly unusual to put an obligation on person A to pay some of person B's taxes just because they purchased a product/service off them.

DFB-D

https://www.boards.ie/discussion/comment/120658785#Comment_120658785

It's more common for companies to do this on Dividends or builders who hire subcontractors. But agreed, a lot of hassle for tenants to do this.

But the requirement is not new, just now it is on a new platform and not thought the tenants tax return.

DownByTheGarden

https://www.boards.ie/discussion/comment/120658785#Comment_120658785

Some of them will go back home abroad never to be seen again too.

Revenue will want their money though and the landlord will be the one who has to pay it, even if the tenant kept it.

themoone

I can understand the logic behind it however if there is already an agent and the Tax returns are submitted regularly then the only benefit for this is that the revenue establishes a direct debit system as opposed to preliminary tax. It also seems that if the gross rent is set up there is no way to change it "When the system goes live from 1 July 2023 the NLWT system will allow users to amend any non-financial aspect of a rental notification. Once a RN is selected in the search functionality, the collection agent or tenant/other has the option to amend some or all fields of the RN with the exception of (i) Gross Payment amount, and (ii) changing the RN type, for example, an RN from a collection agent instead of an RN from a tenant". What happens if rents fall like in 2020?

Darkest Horse

Just on this if someone could clarify I’d appreciate it. My father is a foreign based landlord and wouldn’t be the type to keep up to date on these rules so almost certainly doesn’t know about it. He has an agent collect the rent on his apartment monthly so has no direct contact with his tenant. Can he continue doing tax returns through his accountant in the way he has always done or does he also need to use this new platform?

themoone

@Darkest Horse, The platform is for the 20% the tenant/agent was to withhold for tax purposes.

So what happens is the agent will set up the platform and pay the 20% and at the end of the year the landlord will file the tax return and use the withheld tax as credits. A bit like preliminary tax only it is a flat rate 20%.

DFB-D

https://www.boards.ie/discussion/comment/120719235#Comment_120719235

Income tax returns are still submitted normally for the LL.

It is just the tenant/agent withheld amount treatment which has changed.

Your dad probably should get an agent he trusts to ensure the amounts are paid to revenue.