I rented out my home without notifying the bank or the Revenue

OK, so can we agree the consensus would appear to be, the guy needs to go get proper advice, with a view to regularising his position as soon as is feasible for him to do so.

If he gets a PRTB registration, it's quite likely his net rental income will be below 3,174 and he won't be required to file under self assessment, so he'll escape interest on the late tax (AFAIK).

The rights or wrongs of the current interest deduction rules don't really come into it.

(Thread closed!)
 
mandelbrot said:
The rights or wrongs of the current interest deduction rules don't really come into it.
Click to expand...

I think they do, because in the case we're talking about, if the person isn't able to retrospectively backdate their PRTB registration, they are in serious trouble and this is why they may need both legal and tax advice. I don't want to scare people, but people could end up being financially ruined by this and I genuinely don't think that this was either Brian Cowen's or his officials' intention when they made interest deduction conditional on PRTB registration in order to encourage the latter.
 
Just a recount of my experiences of potential liablity if non PRTB registered. I have a property rented since about 2006 fully compliant with PRTB etc and as a PAYE worker file the appropriate return each October. I have always got a tax rebate ranging from a couple of hundred euro to €1500 one year! (sadly a once off!). Anyhow in 2009 there was a change of tenant (slightly unusual in way it occured) and reregistration with PRTB was required. To make it short after subsequent tax returns i was hit with a tax liability of over €2000 as Revenue claimed we were not PRTB compliant. The matter was resolved quite easily (both Revenue and PRTB were very helpful) and new tax cert changed from above liability to a €250 rebate!.I post this just to illustrate the potential difference in being compliant and not. Also bear in mind this bill was for one year and did not include any backcharges or penalties. It is not for me to judge but i would not like to be in a position where Revenue caught up after a few years of non compliance. I appreciate however the predicament people are now in. However even within being compliant if you are clever with your returns there are a number of ways of legitimately (well almost) claiming against your rental property which helps in some way with the ever increasing costs of being a LL.
 
T McGibney said:
I think they do, because in the case we're talking about, if the person isn't able to retrospectively backdate their PRTB registration, they are in serious trouble and this is why they may need both legal and tax advice. I don't want to scare people, but people could end up being financially ruined by this and I genuinely don't think that this was either Brian Cowen's or his officials' intention when they made interest deduction conditional on PRTB registration in order to encourage the latter.
Click to expand...

FWIW I aagree with you that the policy is very draconian, but whether or not the policy, or it's application, is right or wrong is irrelevant.

It simply is how it is at present and people have to act accordingly. Which as you say may merit the OP getting legal & tax advice here.

Discussion about the rights & wrongs of it are for another (worthwhile) thread IMO.
 
I agree with Pink Cloud. You can't put a price on peace of mind. My lender is unaware that I'm renting out my property (I emailed to sound them out but got no response, then went ahead anyway) but I did cancel the TRS immediately.
It's the right thing to do.
 
Sorry, slightly off topic..

How does Revenue know whether a tenancy complies with PRTB regulations if a tenancy need not be registered with PRTB ?
 
oldnick said:
Sorry, slightly off topic..

How does Revenue know whether a tenancy complies with PRTB regulations if a tenancy need not be registered with PRTB ?
Click to expand...
Not sure I know exactly what you're asking nick, but:
Well if they see a tenancy that isn't registered they'll probably ask why is this tenancy not registered. You'd then need to show how/why it's a letting to which PRTB requirements don't apply...
 
Yeah,it was an idle question really. I just wondered after reading aido's post why Revenue said the tenancy was not PRTB compliant without having sent a letter asking for proof that the tenancy was a 35yr lease, whether there was a landlords child living there, or one of the other exemptions.

Actually i'm still unsure how Revenue or PRTB would ever know whether a property was rented if a landlord kept quiet. How could Revenue actually see a tenancy that wasn't on any PRTB list -(if,indeed, they could even understand that rather messy list of PRTB. )
 
Last edited:
Sorry if my post was unclear..... What I meant when I said 'non compliant' I meant from a tax point if view. My understanding is that in order to claim or offset the mortgage interest payable (75%) against income (I.e. rent) one has to be registered with the PRTB. In my case where Revenue initially could not find a record of the tenancy they disallowed this claim hence my liability for tax on profit from rental income. If no claim for this allowance is being made then my understanding is that Revenue would not be aware of rental property unless they find out by other means. Hope that clarifies!
 
Just to take oldnick's point a bit further tho, how would the PRTB know if you were late registering a tenancy either? All you would need to do is put a recent date (within the last month) as the start date of the tenancy to avoid any penalties no?
 
Ceist Beag said:
Just to take oldnick's point a bit further tho, how would the PRTB know if you were late registering a tenancy either? All you would need to do is put a recent date (within the last month) as the start date of the tenancy to avoid any penalties no?
Click to expand...

The tenant has to sign the registration form as well AFAIK, so they'd have to agree to the charade, but if they do then you'll almost certainly be off the hook for the late reg fee.
 
mandelbrot said:
The tenant has to sign the registration form as well AFAIK, so they'd have to agree to the charade, but if they do then you'll almost certainly be off the hook for the late reg fee.
Click to expand...

There's the thing mandelbrot - the tenant does not need to sign this form. All they provide is their PPSN number. So I see no reason why any landlord would ever pay a late registration fee as there is no way to to prove it is ever late! Of course it would mean the landlord couldn't claim tax relief for the rent received during the time the registration was not submitted for, there is that side of it!
 
There's the thing mandelbrot - the tenant does not need to sign this form. All they provide is their PPSN number. So I see no reason why any landlord would ever pay a late registration fee as there is no way to to prove it is ever late!
Click to expand...

You are correct, tenants no longer have to sign the form, however, problems may arise if there is a problem with the tenancy. Say the tenant has an issue & brings it to the PRTB and can prove that they have been resident for 3 years & the landlord only registered a year ago. The tenant will almost certainly be able to prove they have been there for 3 years via ESB bills, deposit chq, tenancy agreement etc.

If that is the case, the landlord may then be in trouble with revenue who may disallow interest relief that the landlord has claimed. I reckon this is an area revenue will clamp down upon as it is an easy one for them.

I agree with T McGibney - this is a very harsh penaly for someone who has not paid up.

I worked with an accountant (office admin) & recall a client who had not registered due to illnesses & lack of awareness (right back when it started up) - they were unable to write of the substanial interest for a year due to not being registered.
 
oldnick said:
Actually i'm still unsure how Revenue or PRTB would ever know whether a property was rented if a landlord kept quiet. How could Revenue actually see a tenancy that wasn't on any PRTB list -(if,indeed, they could even understand that rather messy list of PRTB. )
Click to expand...
Not sure about Revenue - but if a conflict were to arise between LL an tenant, who's to say they wouldn't make a few calls....in fact, they could do this in the case of revenue also. It's probably unlikely - but from time to time (not sure whether read here or on boards.ie), I've come across posts where a disgruntled tenant is thinking in terms of doing this.
 
Not to mention the NPPR levy- I have a file where a client is buying a property where the NPPR levy was not paid, though it should have been, and the Vendor now has to cough up 2400 in levies and penalties.
 
Vanilla said:
Not to mention the NPPR levy- I have a file where a client is buying a property where the NPPR levy was not paid, though it should have been, and the Vendor now has to cough up 2400 in levies and penalties.
Click to expand...

And there's also the possibility of a clawback of First Time Buyer stamp duty relief, potentially the biggest cost of all in this situation...
 
sandal said:
I am starting to feel very worried that I will be 'found out' and I fear what may happen. Am I thinking about it too much or what do others advise?

Are other people in the 'same boat' as me?

Any advice welcome.
Click to expand...

I think you are absolutely crazy not to sort this out, and you can still sort it out. If you want to sort it out and stop the worry then post back. It is oh so not worth risking what revenue can throw at you.

Yes you can afford to lose TRS because the landlord mortgage interest relief you are entitled to is worth more. If you have another property and have equity in it all you are doing is building up a backlog of taxes, penalties and interest with revenue and they will take eventually the equity and your savings if you have any.

Have you done the actual figures on what you can and cannot afford? Why don't you do the money makeover thread and give all the details so you may be given some good advice and help.

Remember revenue are in no hurry to catch you, revenue have all the time in the world, there is no limit to back taxes. How they catch landlords ?
1. PRTB is sharing data with revenue, revenue are not wasting time looking up the PRTB list of houses
2. Tenant's claim rent tax relief, even if they don't inform the landlord, so revenue have you right there
3. Tenant's claim social welfare rent, even if they don't inform the landlord and social welfare are sharing info with revenue
4. Now with the new property tax being linked to ESB bills, that's going to flush out quite a few landlords
5. Apparently revenue are knocking door to door, not sure if this is true
6. Someone reports you to revenue, an upset neighbour of yours or a neighbour to your rented property who is upset with your tenant etc etc etc

If you don't sort it out, this small worry that you have now will grow and grow. You can decide to do something about it. If you want to. And the numbers will be getting more and more freightening. Believe it or not Revenue are currently being very nice and will come to arrangements.
 
Folks

Askaboutmoney has a strict privacy policy.

Where someone's identity may have been compromised, we delete their posts.

Under the circumstances, I would ask people to address the matters in this thread without referring to other threads.

Thanks
 
You must log in or register to reply here.
Back
Top