Want to sell investment property - I have paid no taxes in 11 years

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Redwood1964

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Hi there

Would anyone hazard a guess as to what I owe if I haven't paid any of the costs, including Rental Income Tax, PRTB, NPPR, USC, etc... for the past 11 years?!

I have been unwell for most of that time but that's beside the point as I couldn't afford to pay and thought that these could all be paid back upon sale of the property.

I started out with a €200,000 mortgage which has now reduced to €126,000.
I've had 5 sets of tenants during this time with the rent just about covering the mortgage repayments.

Now I've discovered that the likes of the PRTB, NPPR and USC need to be paid before the property is sold.

I cannot pay them as I'm only on a welfare payment for the past 10 years.

The apartment is now worth close to €400,000 and has two good tenants in situ willing to stay for another year.

All costs of keeping the property in good condition have been loans from my family which I will pay them back on completion of sale.

Can somebody do the sums because I am floundering with all the penalty charges, etc...

Thank you in advance
 
Over 7k in NPPR anyway.
Did you disclose to welfare that you had an apartment generating income?
 
Redwood1964 said:
I started out with a €200,000 mortgage which has now reduced to €126,000...

I cannot pay them as I'm only on a welfare payment for the past 10 years.


The apartment is now worth close to €400,000
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Of course you can pay your taxes. You have equity of €270k which should be enough to pay the taxes, interest and penalties.

You need to engage an accountant immediately to sort this out with the Revenue.

You have been repaying capital on your mortgage instead of paying taxes. You will get little sympathy from Revenue.

Brendan
 
Brendan Burgess said:
Of course you can pay your taxes. You have equity of €270k which should be enough to pay the taxes, interest and penalties.

You need to engage an accountant immediately to sort this out with the Revenue.

You have been repaying capital on your mortgage instead of paying taxes. You will get little sympathy from Revenue.

Brendan
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I certainly hope it won't eat up the equity to that extent! Thanks Brendan.
I could only afford to pay the capital on the mortgage. The rest was for the never never.

Can you recommend a good accountant?
 
jim said:
How did you calculate that? Whether back of envelope or front.
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Assumed that the apartment was similar to my own and worked off those figures.

For example:

- Costs enough to eliminate 20% of the rental income.
- In the context of the above, the fact that for a long time non payment of the NPPR charge means no deduction for mortgage interest.
- Tax of 50% of the balance (so effectively tax equal to 40% of the rental income based on a 50% taxpayer). The fact that the OP is on social welfare may bring the tax rate down to (say) 30% which would obviously reduce the headline number.
- 8% interest per annum imposed by Revenue (non negotiable).
- A mitigated penalty based on the making of a Qualifying Disclosure.
 
OP - you had a rental income while drawing a social welfare payment, did you declare this income to social welfare if not they too may come looking for pay back. It's hard to feel sorry for you, you had a responsibility to pay your taxes along with everyone else. Paying nothing for 11 years is totally unacceptable.
 
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moneybox said:
did you declare this income to social welfare if not they too may come looking for pay back.
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Op has already stated the benefit was not means tested.

moneybox said:
It's hard to feel sorry for you
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To be fair I really don't get the impression the OP is looking for your pity,

moneybox said:
you had a responsibility to pay your taxes along with everyone else. Paying nothing for 11 years is totally unacceptable.
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or a lecture.
 
venice said:
To be fair I really don't get the impression the OP is looking for your pity,

or a lecture.
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Hi venice

If someone comes along saying that they have paid no tax for 11 years, I think that a poster is quite right to say that it is unacceptable.

Brendan
 
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Brendan Burgess said:
Hi venice

If someone comes along saying that they have paid no tax for 11 years, I think that a poster is quite right to say that it is unacceptable.

Brendan
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Time for me to try and defend myself.

Firstly, it was always on my mind to pay back what I owed, whatever interest and penalties incurred.
I didn't think that I was liable in the earlier years for rental income tax as I had no income from the rent. Just about breaking even.
PRTB I never heard about, NPPR the same until the past couple of years. They were to go in the pot to be paid when I sold the property.

I could not afford to pay for them otherwise. This is probably my greatest weakness - I couldn't afford to be a landlord.

I was not in the company of other landlords, I never learnt through conversation about the extent of the tax exposure but I was a good landlord. I looked after my tenants and in turn they took care of the property and stayed long periods.

Secondly, I mentioned in my first post that I was not well for this period. I have been mercilessly unwell. That's all you need to know about that. It is something that is cumulatively excruciating and takes up my life and I will die from it. I don't want your pity for this but I do want you to see that all is not as it seems.

The apartment was something I bought and could buy when I was a working man. I fell in love with it. I keep pictures of it on my bedroom wall.

I'd hate to sell it but it looks very much like I'll have to because it has just come to my attention that all this tax needs to be taken care of before the sale. I'll have no problem selling it myself because, as I say, I love it and know it better than any real estate agent.

I write this out of frustration and out of respect for Askaboutmoney and Brendan Burgess.

Thank you for your help
 
Ok so start at the beginning.

1. Did you claim tax relief at Source on mortgage interest?
2. Did you claim an exemption from Stamp Duty?
3. Income tax: you need to summarise your rental income per calandar year.
Get the mortgage statements and summarise the mortgage interest for each calendar year. 75% of the interest is allowable if the tenancy is registered with the PRTB. ( you can retrospectively register the tenancies)
Summarise all relevant expenses per calandar year.
4. Get a summary of your social welfare benefit.
5. The NPPR is due €7k.

Take all this info to an accountant and they will summarise the income and compute the tax.
 
Hi Redwood, as a resource AAM is a good resource full of the knowledgeable and the less knowledgeable characters, each post confusing or enlightening, therefore it is a research database. You need solutions now that you are enlightened and that necessitates finding a good accountant knowledgeable in revenue and property related matters. A few posters on this website have website addresses and au fait in such matters, look them up, give them a call, meet them and get this problem sorted with the relevant parties and move on. Life can be short enough and bills are irrelevant when that time comes.
As a landlord I saw your post on that other website, solutions are with a good accountant now you are enlightened in terms of approx costs.
 
Agent 47 said:
Hi Redwood, as a resource AAM is a good resource full of the knowledgeable and the less knowledgeable characters, each post confusing or enlightening, therefore it is a research database. You need solutions now that you are enlightened and that necessitates finding a good accountant knowledgeable in revenue and property related matters. A few posters on this website have website addresses and au fait in such matters, look them up, give them a call, meet them and get this problem sorted with the relevant parties and move on. Life can be short enough and bills are irrelevant when that time comes.
As a landlord I saw your post on that other website, solutions are with a good accountant now you are enlightened in terms of approx costs.
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Thanks very much for your help. How do I find the posters with website addresses?
 
My point of contact is Damien in

He looks after my landlord responsibilities and covers Dublin and surrounding counties i believe.
 
CGT will be big on this. Do you currently own the property you reside in? Could you sell that and move into apartment as primary home to eliminate CGT?
 
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