LPT: Every tenant of mine is paying it.

[T McGibney]

Obviously there isn't a point! However, I never said this was the intention of LLs......I meant the ones whom due to having bought the property at inflated price and now the rent wont cover the mortgage, due to previous falls in rent. I dont think LL should be just able to put it up in this scenario simply to cover the fact they they made a bad investment and are having to pay for it.

But we're not talking here about covering investment losses, merely covering overheads.

To a certain degree, yes maybe - but 100% of these costs, I don't agree. Surely as a LL people knew that it's not just profits. If it was, we all would be LLs

Passing on 100% of your overheads doesn't mean making a profit, it simply means breaking even. Again this is very basic economics.

 

[mandelbrot]

^^^^^ +1

This thread is gas - would people be up on their high horses if house insurance costs (or any other overhead of owning rental property) were being increased by several hundred a year and LL's were saying they'd have to pass it on in increased rents..!

 

[AlbacoreA]

Obviously there isn't a point! However, I never said this was the intention of LLs......I meant the ones whom due to having bought the property at inflated price and now the rent wont cover the mortgage, due to previous falls in rent. I dont think LL should be just able to put it up in this scenario simply to cover the fact they they made a bad investment and are having to pay for it.

This has got nothing to do with mortgages. Its about the LPT. The LPT is simply another cost to the business. Costs get passed on to the customer. Its that simple. There are rules as to how much and how often the rent can be raised. So they can't simply put it up. They can however increase the rent to the market rate when it next comes up for renewal.

The market rate is likely to increase due to the LPT. How can it not.

 

[AlbacoreA]

To a certain degree, yes maybe - but 100% of these costs, I don't agree. Surely as a LL people knew that it's not just profits. If it was, we all would be LLs

How do you figure a business can survive if it doesn't cover it costs or make a profit?

 

[oldnick]

Gosh - I read Alaska's and username's pots and I realise how little tenants understand -or care - about LL's problems.

There's this attitude that LLs are rich,greedy,selfish and that tenants are poor and exploited.

The fact that spending more than you earn means you end up broke is something that some posters don't understand when it applies to LLs

They understand it with businesses-large or small.
They understand it when it comes to their own personal finances.
But when it comes to landlords they just don't get it. LLs are supposed to rent for less than the costs of running their business !!

Is it an Irish thing based on the past? Landlords, like "informers" being inherently on the wrong side ?

 

[ajapale]

This is what Treshold.ie the private rented housing sector charity has to say:

If your landlord seeks to pass this tax on to you directly please contact your nearest Threshold office for further advice.

and from Citizens Advice.

Under Section 19 of the Residential Tenancies Act 2004 (pdf) Landlords cannot charge more than the open market rate for the apartment or house.

Tenants should note that the provisions of the Residential Tenancies Act only apply to mainstream private rented housing - local authority tenants are covered by different laws. You can find out more about your landlord’s rights and obligations here.

Your landlord cannot review the rent more than once a year unless the accommodation has changed substantially. This might, for example, constitute a complete refurbishment or another major change.

You can ask your landlord to review the rent if:

You think it is more than the current market rate for the property or

You want a new review and more than a year has passed.

Your landlord has the right to review the rent annually. However your landlord must give you at least 28 days notice (in writing) before increasing the rent.

 

[Dermot]

Why then have the Dept of Finance left it optional for Co Co's to pass on the LPT to Local Authority Tenants.

What Section of what act might Threshold be quoting to back up their position.

Nobody can give a definitive answer as to the open market value of a property rental. There could be 50- 75 pcm of a variation at the lower end and greater as you go more up market

 

[oldnick]

Ajapale ..

I'm unsure of the purpose of your post.

It gives the rather insulting impression that LLs on AAM don't know that LLs can't raise rents more than once a year, must give at least 28 days notice , can't charge above market rent (the bit you highlight in red !) etc etc.

And, whilst it is the owner's legal liability to pay the LPT directly to Revenue, I am unaware ( and Threshold have not declared ) that the LL cannot include this -or any other cost -in the rent , as long as the LL follows the other conditions of rent reviews.

 

[Luternau]

^^^^^^ agree!

I don't get the point of your post Ajapale.

Oldnick has stated he gives 6months notice. The law/guidelines state that he can raise rents once per year. Tenants don't have to pay the increase if they feel its not a fair rent. Simple economics on both fronts! No mystery-nothing underhand.

LLS get too much stick. Most are professional and look after their tenants. Their tenants realise the benefit of this and are happy to pay a Market rent to live in well managed and mainatained property. Threshold have a vested interest to beat down landlords-any comment that make does not necessarily mean it applies to the whole rental sector.

By the way, I am a landlord, and would gladly exit the sector, was there a viable exit path. Sadly there is not. In the meantime, I along with other good LLS will continue to charge what we believe are fair rents that both reflect the quality and location of the property and that cover all costs, new or old. If threshold have a problem with rent increases, they should lobby the Govt/Trioka. It has been well documented and reported that the LPT would lead to increased rents-so why the surprise that it has come to pass?

 

[mandelbrot]

Wrong , but like most things in Ireland their is a rogue element that are badly in need of been properly regulated so that they cant do exactly what you have done . Attitudes like yours will bring that day much closer to the detriment of us all .

What do you mean unregulated? Ever heard of the PRTB??

I'm a tenant myself, have never owned a house, and TBH I can't make any sense of what you've posted. It stands to reason that some LL's will need to pass on the cost of LPT in increased rent.

At the end of the day, rents are always dictated by supply & demand, and LPT will feed into that - as previous posters have said this is very basic economics.

 

[Boyd]

Gosh - I read Alaska's and username's pots and I realise how little tenants understand -or care - about LL's problems.

There's this attitude that LLs are rich,greedy,selfish and that tenants are poor and exploited.

The fact that spending more than you earn means you end up broke is something that some posters don't understand when it applies to LLs

They understand it with businesses-large or small.
They understand it when it comes to their own personal finances.
But when it comes to landlords they just don't get it. LLs are supposed to rent for less than the costs of running their business !!

Is it an Irish thing based on the past? Landlords, like "informers" being inherently on the wrong side ?

Well in fairness you did say earlier

Each LL can have their own approach to rent reviews . I suppose it depends on how well one gets on with tenants, how greedy one is and, of course, what prevailing rents in the area are."!!

I think the point is that the tax is on the ownership of the property, something you as a LL have chosen i.e. to buy a property. Hence you are liable for said tax. You get the benefit of owning the house, what benefit does the tenant get for paying your taxes?

How is it different from passing on your PRSI to the tenant?

 

[murphaph]

Wrong , but like most things in Ireland their is a rogue element that are badly in need of been properly regulated so that they cant do exactly what you have done . Attitudes like yours will bring that day much closer to the detriment of us all .

Germany has a pretty highly regulated rental sector according to most observers. In Germany the LL can pass the entire cost of his property tax on to his tenant (so long as he mentions this in the lease agreement, which obviously most landlords do!)

Most things can be passed on to the tenant in fact. These include:

-Property Tax
-Water, heat and warm water heating costs
-Lift repairs
-Street cleaning
-Waste disposal
-Sewage treatment
-Street lighting
-Chimney sweep/boiler servicing
-Garden/grounds upkeep
-Buildings Insurance
-Liability Insurance
-Building superintendent/janitor
-Communal TV aerial/Cable installation
-Communal washing machine etc.
-Building cleaning
-Pest control costs

All these things are billed apart from the rent. The rent must be paid and then an estimated amount is added to cover the above things and then once a year the landlord will send a refund if the estimate was to great or a bill for the difference if too small.

 

[murphaph]

How is it different from passing on your PRSI to the tenant?

It is no different...but the tenant IS paying the PRSI already!!! PRSI is a cost to the LL, just like the LPT. Costs get passed on to the customer in every line of business. Do you think Dunnes pays it's taxes out of something other than what you spend in their shops?

 

[AlbacoreA]

...I think the point is that the tax is on the ownership of the property, something you as a LL have chosen i.e. to buy a property. Hence you are liable for said tax. You get the benefit of owning the house, what benefit does the tenant get for paying your taxes?...

Use of the house. Its called rent.

The only benefit of owning a house is making money. If its not making money there no point. How do you think the LL pays their bills, food, clothes, a car, tax, pension, medical bills. The rent. Its the LL income. Its all the same pot of money.

 

[AlbacoreA]

This is what Treshold.ie the private rented housing sector charity has to say: "If your landlord seeks to pass this tax on to you directly please contact your nearest Threshold office for further advice."

The LL may not pass it on directly. But it will be passed on indirectly, in the form of rent increases. It would be naive to think otherwise. Its simple economics.

 

[murphaph]

The LL may not pass it on directly. But it will be passed on indirectly, in the form of rent increases. It would be naive to think otherwise. Its simple economics.

Indeed. It would be more transparent for the tenant if the LL could bill things out of his control separately to the rent as in Germany, but Threshold don't appear to want that. They want the LL to suck up all the new/increased costs of running his business and effectively insulate tenants from the real world. As I said over on boards.ie, landlords in Ireland are becoming more and more like surrogate mammies.

 

[serotoninsid]

...but Threshold don't appear to want that. They want the LL to suck up all the new/increased costs of running his business and effectively insulate tenants from the real world.

Not just threshold but some posters on this thread also.

I'm not a landlord - but it's obvious to anyone - all costs have to be passed on. The laws of supply and demand will dictate - but ultimately, costs are going to have a bearing on that (unless there is massive oversupply in the market).

Someone took umbridge at oldnick's use of the word "greedy" - and it's really a non-argument. Landlords and tenants enter into an agreement of their own free will. Just like in the couple of years following the tiger, tenants were in a strong position and could negotiate rents downwards, landlords can and will up the rental if the market will sustain that. If that's deemed to be 'greedy', why would a tenant enter into such an agreement??

 

[AlbacoreA]

The market value ultimately determines the rent.

 

[BudgetBrenda]

I am a small landlord - one property. My tenant has agreed to pay the LPT because (a) it is for local services (in theory anyway!) - she uses local services, not me and (b) her rent is below the going rate anyway and she know she has a good deal. She will give me a cheque for the LPT which i will forward to revenue - i don't need to charge double to allow for tax as i wont receive it as rental income.

 

[mandelbrot]

It doesn't work like that.

The cheque she writes, notwithstanding that it's for the amount of the LPT would be viewed as a payment in the nature of rent - it would be the same if the ESB account / bill was in your name and she gave you a cheque to cover it every 2 months.