Is LPT allowed against tax for investment properties?

Apologies if this has been covered on AAM before but had a debate today with someone over whether LPT is an allowable expense against investment properties. My understanding was that unlike the Nppr which was not allowable the LPT is. Can someone confirm. Thanks

We are still waiting on Michael Noonan to confirm . He last said he was considering a phased in approach to relief .

Don't ask

Don't ask, just do it.

You've incurred a legitimate expense in connection with your letting. Surely that is allowable.

If Revenue get stroppy just argue your side of the equation.

Ultimately, a judge in court is the final arbiter and you can plead your case there.

robert 200 said:

We are still waiting on Michael Noonan to confirm . He last said he was considering a phased in approach to relief .

Click to expand...

I'm not sure Michael Noonan's opinion is in any way relevant here, at least until or unless he ever chooses to reflect his opinion in an amendment to the legislation.

valparaiso said:

You've incurred a legitimate expense in connection with your letting. Surely that is allowable.

Click to expand...

The LPT has nothing to do with letting expenses, it is not an expense incurred in letting a property. It is a tax on the property ownership.

A PAYE worker doesn't get an income tax credit/income deduction for the LPT he pays for his PPR.

It is not equitable that a landlord should get an income tax credit/income deduction for LPT he pays for his property that he chooses to let.

STEINER said:

The LPT has nothing to do with letting expenses, it is not an expense incurred in letting a property. It is a tax on the property ownership.

A PAYE worker doesn't get an income tax credit/income deduction for the LPT he pays for his PPR.

It is not equitable that a landlord should get an income tax credit/income deduction for LPT he pays for his property that he chooses to let.

Click to expand...

With respect, this is a reductionist argument. It can similarly be argued that Buildings insurance is "not an expense incurred in letting a property" as it is an obligation based on property ownership, ie the owner insures the building to protect its value in the event of fire etc. Such insurance is necessary for this purpose regardless of whether or not the property is let.

Yet buildings insurance is clearly allowable against taxable rents.

But property insurance is not a tax but it is a legitimate business expense. Why should anyone be allowed to claim a tax-credit or refund for paying a tax?

Why not allow PAYE workers to claim their income tax as a tax credit?

mathepac said:

But property insurance is not a tax but it is a legitimate business expense. Why should anyone be allowed to claim a tax-credit or refund for paying a tax?

Why not allow PAYE workers to claim their income tax as a tax credit?

Click to expand...

Sorry, I don't understand your point. Is it that taxes can't be used as deductions against taxable income?

This is clearly not the case as the tax system already allows for many taxes, eg road tax, excise duty, non-recoverable VAT, to be treated where appropriate as deductions against taxable income.

Also, the specific provisions of the Taxes Acts referring to rental income allows as a deduction, "rates levied by a local authority".

T McGibney said:

Sorry, I don't understand your point. Is it that taxes can't be used as deductions against taxable income?

This is clearly not the case as the tax system already allows for many taxes, eg road tax, excise duty, non-recoverable VAT, to be treated where appropriate as deductions against taxable income.

Also, the specific provisions of the Taxes Acts referring to rental income allows as a deduction, "rates levied by a local authority".

Click to expand...

Except that the LPT is not a rate levied by a local authority, it's a tax imposed by an Act of the Oireachtas. (Not saying it's not deductible though!)

mandelbrot said:

Except that the LPT is not a rate levied by a local authority, it's a tax imposed by an Act of the Oireachtas. (Not saying it's not deductible though!)

Click to expand...

Except that isn't the point being discussed here.

(btw, one could argue that local authorities' powers to levy rates similarly stem from an Act, or Acts, of the Oireachtas, although that's an argument for another day)

I thought the LPT legislation does indeed allow the relevant local authority to vary the amount within a certain percentage, making it a rate levied by a local authority, or at least it could be argued thus. I am claiming it anyway. I never claimed the NPPR or HH charge but to hell with that.

murphaph said:

I thought the LPT legislation does indeed allow the relevant local authority to vary the amount within a certain percentage, making it a rate levied by a local authority, or at least it could be argued thus. I am claiming it anyway. I never claimed the NPPR or HH charge but to hell with that.

Click to expand...

The charge is levied by central government, it's a central tax. Just because the local authority has the discretion to vary the rate +/- within a narrow band doesn't mean they are levying the tax.

Yeah I'm sure it'll have its day in court where a judge will decide what it is.

i can't post a link as i don't have a minimum post count, but LPT is not currently deductible.

See question 9 in LPT FAQs on Revenue website.

QUOTE=mandelbrot;1379960]The charge is levied by central government, it's a central tax. Just because the local authority has the discretion to vary the rate +/- within a narrow band doesn't mean they are levying the tax.[/QUOTE]

From NPPR website:

The NPPR Charge
The Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011, introduced a €200 annual charge on non principal private residences, payable by the owners to the local authority in whose area the property concerned is located.
In order to maximise compliance and encourage payment of outstanding NPPR charge arrears, section 74 of the Local Government Reform Act 2014

And particularly this :

Non-Principal Private Residences and Liability
The charge on non-principal private residences (NPPR) was introduced in 2009 under the Local Government (Charges Act 2009, as amended. The charge is payable by the owners of private rented accommodation, holiday homes and other non-principal private residences. It is a matter for persons who own a non-principal private residence on the liability date to declare so and to pay the €200 charge by the due date annually. Income from the NPPR is used to assist in financing the provision of essential local services provided by local authorities. Internationally, local services are administered by local authorities and financed by local service charges. In Ireland, local authorities are responsible for, among other services, public parks; libraries; open spaces and leisure amenities; planning and development; fire and emergency services; maintenance and cleaning of streets and street lighting. These facilities benefit everyone.

From the Household charge:

[broken link removed]

The Household Charge (HC) was an annual charge introduced by the Local Government (Household Charge) Act 2011

and

What will the Household Charge finance?


Revenues from the Household Charge will support the provision of local services. Internationally, local services are administered by local authorities and financed by local service charges. In Ireland, local authorities are responsible for, among other services, public parks; libraries; open spaces and leisure amenities; planning and development; fire and emergency services; maintenance and cleaning of streets and street lighting. These facilities benefit everyone.

LPT

I haven't gotton around to that yet.

murphaph said:

Yeah I'm sure it'll have its day in court where a judge will decide what it is.

Click to expand...

When you get to court, please provide him with the links to the websites outlining that the charge/fee/tax/rate/liability/nppr/hc/lpt is for local services and is the same as what used to be called rates, which are fully deductable.

Most of these relatively minor tax issues never reach the courts.

Back in the mid-80s many experts including then barrister & qualified accountant Willie O'Dea stated their understanding that DIRT tax was unconstitutional, but in the past 28 years DIRT has never bothered anyone sufficiently for them to commit to spend hundreds of thousands of Euro on a High Court/Supreme Court challenge.

Heading on NPPR website. And the same on the HC website.

Nothing at all to suggest it's a tax levied by central government.

Edit, the heading won't paste for me, it's a picture image, not sure how to do that?

But it says something in Irish and then Environment, Community and Local Government, and it's got a funny ball symbol. Is that the a Department?