LPT: Every tenant of mine is paying it.

I can understand utilities, rubbish,TV being compulsory costs to the tenant (depending on the agreement). They're all part of the rent and the deductible costs.

LPT is not the obligation of the tenant we are constantly told.
If someone feels that they wish to make a purely voluntary gift of LPT payment to someone how is this rent ? It's not in any agreement, there's no obligation, it's purely a voluntary gesture.

If it is certain that this is not a gift , how about book tokens ? Can Brenda's tenants give her book tokens?

As this is not a deductible cost (although I wonder about that) I feel it behooves both LL and tenant to help reduce the cost of making this payment. A voluntary gift would seem a reasonable way of doing this.
 
Sadly -and wrongly in my opinion - it is the legal obligation/responsibility of the LL to pay LPT - as per the websites of Revenue, Citizens Advice and Threshold, plus the usual anti-LL lobby as represented by a few posters on this thread.

There's no getting away from it.
If no LPT is received then Revenue will go after the property owner - not the person who benefits from the LPT i.e. the tenant.

My point in the above post is if, indeed, the tenant is under no obligation to pay the LPT but wishes to pay it then why should this be regarded as rent. It has nothing legally to do with rent we or so we are told by the above authorities.

Now sensible people know that ,of course, LPT is a cost to the LL and ultimately has a lot to do with rent. But if the law says there is no connection then ,fine - let a tenant pay it if he/she wishes but it ain't rent. Possibly a gift but under the gist tax level.

I'm just wondering if this is a way for Brenda to avoid a rental tax problem.
 
I think the tenant would have to pay the charge directly if even that would be legitimate. You could otherwise claim that all your rent was merely a gift and pay no income tax on it.
 
oldnick said:
My point in the above post is if, indeed, the tenant is under no obligation to pay the LPT but wishes to pay it then why should this be regarded as rent. It has nothing legally to do with rent we or so we are told by the above authorities.

Now sensible people know that ,of course, LPT is a cost to the LL and ultimately has a lot to do with rent. But if the law says there is no connection then ,fine - let a tenant pay it if he/she wishes but it ain't rent. Possibly a gift but under the gist tax level.

I'm just wondering if this is a way for Brenda to avoid a rental tax problem.
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Ugh all of the above merely enforces my point the its the LL who should pay it upfront. Its a straight forward property ownership tax, LL pays it for benefit of owning the house. If they want to try to pass it onto tenant thats LL/tenant problem. There's no 100% agreement in this matter, its up to the individual tenancy relationship
 
Yes, Albacore I mean tax on rental income.

Username
- nobody is disputing that LPT is LL's legal liability. And LLs should- legally,not morally - pay it.
The result is is that basic economics dictates that the tenant will pay it via higher rents.

As LPT is not tax-deductible LLs will realise ,like belatedly I did, that the LPT is actually costing up to twice the amount of the LPT -which ,again, will end up costing the tenant.

It's been said that "the market dictates the rent" .
But if costs are greater than income then the entity concerned , whether a shop, hotel or rental property will eventually cease operating.
The market may influence the rent if a properties are available for rent. But if they're not?

Most people expected a higher LPT percentage. In U.K it's about 1% of value,but there it's the resident who pays.
If the LPT increases after 3 years and is still not tax -deductible then either LLs will go out of business or tenants will pay much much more .
 
Yikes, we're getting into silly territory now...

It's very simple - if Revenue perceive that a tenant is making good to the LL the cost of the LPT, regardless of what way it's dressed up, the additional amount/value changing hands will be assessed as rental income.

If you ask someone to give you a gift, of an amount equivalent to the LPT charge, in order to not have their rent increased at the next review, what other conclusion can there be.
 
oldnick said:
- nobody is disputing that LPT is LL's legal liability. And LLs should- legally,not morally - pay it.
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Why should the LL not both legally and morally have to pay it?

If, as you keep repeating, it's not tax-deductible (which I'd say is still unclear) and results in a LL needing to recover double the amount from the tenant to cover the cost, this presupposes the LL is 1) making a net profit and 2) a high rate taxpayer. Plenty of LL's may be neither.

Anyway that's not really relevant - the tenant pays a market rent for a property. If its in a nice area with good services the market rent will be higher - presumably the property value (and hence LPT) will also be higher. I don't see why the LL shouldn't be liable for the LPT though - they benefit from ownership of the asset being taxed, and can dispose of it if they want.

To me it's no different than if the commercial rates for a restaurant increased, and the restaurant owner has to increase his prices accordingly - it doesn't confer a moral imperative on the customer to pay his rates - they either dine there and pay his price, or they go elsewhere.
 
mandelbrot said:
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 .
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That point is highly debatable in a context where the amount of the rent is recorded in lease contract, and registered accordingly with the PRTB. I cannot see how the landlord and tenant can conspire to vary the agreed rent without altering the terms of the tenancy,and I don't see how Revenue can pretend that such a variation exists when it clearly hasn't - the tenant has merely voluntarily agreed to pay a cost attaching to thr property.

The same principle would apply if the tenant breaks something in the property and volunteers or agrees to pay the cost of repair. It would be a nonsense to count this as additional rent.
 
Mandelbrot

- The moral question of LPT is a matter of opinion. In normal economic circumstances there are good arguments for it. I can't find any in the present situation. But I repeat it's a matter of opinion.

- But is it a tax just because one owns property , or is it a tax on residents in order to provide a better local service ? This is the part that confounds me.

If it is a combination of both then let the tax be divided as per France tax sejour/tax fonciere. In U.K. it is entirely on the resident whether owner or tenant. In USA I pay big LPT equivalent but it is expected to be passed on to tenants.
In Ireland ? -it's purely on the owner and we must not ask tenants to pay it !! I think that's crazy !!

-If LPT is tax-deductible, great ! Is it ?

- regarding the voluntary payment by tenant to pay the LPT: This is purely amn argument that I was making. I think it has some validity but of course I'm not sure. I think we should try anything that lessens the cost to the owner (and ultimately the tenant), whilst still paying the tax. (At least until Revenue firmly declares one cannot do this).

- Finally, your last point about the example of rate increases for ,say, a restaurant. First of all rates are a deductible cost - are you sure that LPT is ??

But the key point is the restaurant must include the extra rates unless he is already making great profit and is happy to absorb them. I doubt many LLs are making that much profit that they can absorb LPT without increasing the rent.

If you wish to compare LLs with a commercial bsuiness then let the tax deductible items be the same. rates, interest on loans etc etc.

Anyway that's me finished on this topic for some time.
 
mandelbrot said:
To me it's no different than if the commercial rates for a restaurant increased, and the restaurant owner has to increase his prices accordingly - it doesn't confer a moral imperative on the customer to pay his rates - they either dine there and pay his price, or they go elsewhere.
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...and the restaurant owner pays the rates regardless of whether or not he owns or rents the premises as he gets the benefit of the services provided.

It's called the local property tax and is intended to fund the same things as the rates!
 
This is all moot.

The rent that can be charged is simply a function of demand and supply with possibilities ranging from excess supply, and a likelihood that costs exceed rents, to excess demand, where the landlord can make a good profit.

In the medium to long run, insufficient profits or excess profits will be driven out and rents will tend to a level that covers costs and delivers a reasonable profits.

The introduction of the LPT will have no immediate impact on the market levels of rent as it affects neither supply nor demand in the short term - it is simply another cost.

Oldnick's ability to pass on additional costs in the form of a rent hike only exists because he would probably otherwise have been charging rent below what the market is willing to accept.
 
DerKaiser said:
This is all moot.
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+1
Excellent post DerKaiser! But is the residental private rental market a "free market" in which the laws of supply and demand prevai? Or is it closer to a "cost plus" model as articulated by OldNick and others here?

Either way economics is rarely "simple" in my opinion!
 
T McGibney said:
That point is highly debatable in a context where the amount of the rent is recorded in lease contract, and registered accordingly with the PRTB. I cannot see how the landlord and tenant can conspire to vary the agreed rent without altering the terms of the tenancy,and I don't see how Revenue can pretend that such a variation exists when it clearly hasn't - the tenant has merely voluntarily agreed to pay a cost attaching to thr property.

The same principle would apply if the tenant breaks something in the property and volunteers or agrees to pay the cost of repair. It would be a nonsense to count this as additional rent.
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If a tenant breaks something they either are obliged to pay the cost of repair/replacement - not a payment in the nature of rent, or they aren't obliged to - a payment in the nature of rent.

See para (b) of the definition of rent in the TCA:
"rent" includes-
(a) any rentcharge, fee farm rent and any payment in the nature of rent, notwithstanding that the payment may relate partly to premises and partly to goods or services, and
(b) any payment made by the lessee to defray the cost of work of maintenance of or repairs to the premises, not being work required by the lease to be carried out by the lessee.
 
DerKaiser said:
...... rents will tend to a level that covers costs ...

The introduction of the LPT will have no immediate impact on the market levels of rent as it affects neither supply nor demand in the short term - it is simply another cost. ....
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An immediate effect no. Medium term probably.
 
This question was raised today by a Tenant in the Property Investment & Tenants rights forum.
 
[broken link removed]
Public information guide from the society of chartered surveyors and the Irish Tax Institute.

My landlord is increasing my rent to cover the LPT – can he do this?

The LPT is the liability of the landlord/owner of the property. It is not payable by the tenant.

If the landlord is seeking to increase the rent beyond market rates, you can dispute this by contacting the Private Residential Tenancies Board (PRTB).

In the first instance you should check your lease agreement which will usually stipulate that rent cannot be increased during the existing lease period as a general rule with a fixed term lease.
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