RTB, Revenue and Rent

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Fran777

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5
Hi,

I've got a strange issue. We have a second property that we rent to a family member at a discounted rate. The house is located in Dublin so is in a rent pressure zone. He will be there for another year or two. My question is, when registering with the RTB, should we put in the undiscounted rent of say €2000 per month or what he is actually paying at €1500 per month? For revenue we have put in the €1500 per month and this is what we are paying tax on. So few queries below:

When he leaves, I would like to rent it out again at €2000 per month. But unless we up the rent in the registration now we will be stuck at 2% increase per annum. Is this correct?

Can you change the RTB registration by more than 2% between years? Is this checked? i.e. this year €1500 p/m and next year it would be €2000 p/m.

Will the RTB share our rent with Revenue identifying a discrepancy? i.e. if we put the RTB in at €2000 p/m but the Revenue does not match at €1500 p/m.

I'm welcome to any advice that you may have.

Thanks a mill
 
Is this property already rented? Is there a lease? In terms of family members, what is your relationship? Look at the rtb website, registration and formal lease are not needed with really close family members.
 
Get legal advice on this before you do anything and most definitely before you go next or near the RTB.
 
It is informal with no lease agreement and it is my wife's brother in the house with his kid.

Just looked at the citizens information re the RTB website and it does say that where informal renting to family members is exempt, sorry can't link the page.

If we proceed without registering with the RTB, does anyone know if we are still able to claim interest relief on the mortgage payments against our tax? Also can my wife's brother claim the rent tax credit? Both seem to stipulate that RTB registration needs to be in place? Thanks
 
Actually further reading finds this from the RTB website:

"Instances where a tenant lives with the spouse, civil partner, parent or child of the landlord and there is no written letting agreement in place".
Doesn't seem to cover a brother?

Brings me back to these queries:
  • When he leaves, I would like to rent it out again at €2000 per month. But unless we up the rent in the registration now we will be stuck at 2% increase per annum. Is this correct?
  • Can you change the RTB registration by more than 2% between years? Is this checked? i.e. this year €1500 p/m and next year it would be €2000 p/m.
  • Will the RTB share our rent with Revenue identifying a discrepancy? i.e. if we put the RTB in at €2000 p/m but the Revenue does not match at €1500 p/m.
Thanks again for the replies
 
Fran777 said:
  • When he leaves, I would like to rent it out again at €2000 per month. But unless we up the rent in the registration now we will be stuck at 2% increase per annum. Is this correct?
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Yes, but very few people in your position would register with the RTB. I don’t think your tenant is going to be telling any tales on you.

Fran777 said:
Will the RTB share our rent with Revenue identifying a discrepancy? i.e. if we put the RTB in at €2000 p/m but the Revenue does not match at €1500 p/m.
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It is possible, but not likely. I have no inside knowledge, but I imagine that the information sharing between Revenue and the RTB is more focused on discovering people who pay no tax at all on rental income. There are always going to be discrepancies between rental income declared and the amount on the RTB tenancy registration. These reasons can include discounts, rent arrears, void periods, et cetera.

In summary, I think the socially responsible thing for you to do is simply to pay your tax on all rental income received.
 
Dr Strangelove said:
It is possible, but not likely. I have no inside knowledge, but I imagine that the information sharing between Revenue and the RTB is more focused on discovering people who pay no tax at all on rental income. There are always going to be discrepancies between rental income declared and the amount on the RTB tenancy registration. These reasons can include discounts, rent arrears, void periods, et cetera.
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Just in relation to this supposed information sharing,

- Revenue don't share confidential information with any other arm of government or anyone else.

- Revenue have access to all RTB data and presumably scrutinise it forensically.
 
T McGibney said:
- Revenue don't share confidential information with any other arm of government or anyone else.
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This is not strictly true. They can and will share with law enforcement. But indeed the information flows RTB=>Revenue and not the other way.

T McGibney said:
- Revenue have access to all RTB data and presumably scrutinise it forensically.
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I highly doubt this. There are dozens of taxes, over three million taxpaying units, and only six thousand Revenue staff, the vast majority of them clerical. Revenue doesn’t have the manpower and even if they did it would not pass any cost-benefit test to go scrutinising discrepancies of a few hundred euros.

I would imagine Revenue runs big-data analysis exercises to find people registered as landlords with the RTB with no declared rental income on their system. Sending these landlords a letter is the price of paper and a stamp and a non-trivial share of landlords will simply pay up on receipt of letter. People who don’t are probably prioritised for audit but I repeat small discrepancies between the RTB rent and gross rental income declared have half a dozen innocent explanations and are highly unlikely to be chased by Revenue.
 
Dr Strangelove said:
I highly doubt this. There are dozens of taxes, over three million taxpaying units, and only six thousand Revenue staff, the vast majority of them clerical. Revenue doesn’t have the manpower and even if they did it would not pass any cost-benefit test to go scrutinising discrepancies of a few hundred euros.

I would imagine Revenue runs big-data analysis exercises to find people registered as landlords with the RTB with no declared rental income on their system. Sending these landlords a letter is the price of paper and a stamp and a non-trivial share of landlords will simply pay up on receipt of letter. People who don’t are probably prioritised for audit but I repeat small discrepancies between the RTB rent and gross rental income declared have half a dozen innocent explanations and are highly unlikely to be chased by Revenue.
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Pretty much all of this is in the realm of speculation.

Nobody mentioned anyone being "chased" by Revenue on foot of RTB registration particulars. But it would be naive to conclude that this data isn't fed and incorporated into "customer" profiles on its REAP risk assessment system.
 
7. Exchange of data between Revenue and RTB
Data available to Revenue

When a landlord registers a tenancy, the data that the RTB requires is as follows:
 Address of tenancy
 Capacity (number of rooms, beds)
 Description
 Rent payable
 Frequency of payment
 Date tenancy commenced
 Details of landlord including PPSN
 If landlord is a company, registered company details
 Agent details if relevant

Revenue is entitled to this information on a case-by-case basis by supplying the“identification number” of the landlord in question. An “identification number” is the PPSN in the case of an individual landlord or a Company Registration Number in the case of a company. If an agent has registered on behalf of a landlord, the landlord’s name and the agent’s “identification number” are required. Revenue has requested and obtained information from the RTB on registrations. This information has been useful in a number of contexts, including:

 cross-referencing the number of registered tenancies with the RTB with the number of rental properties on Form 11 returns;
 determining a landlord’s entitlement to claiming mortgage interestrelief on rental property loan interest from 2006 onward;
 confirming data in DSP rent subsidy files;
 identifying undeclared rental properties;
 cross-referencing information provided by tenants on Rent 1 forms
 
By way of an update. I spoke with the RTB today and they confirmed that I do not have to register in this instance unless I want to. However, they said that without registration that I cannot claim relief on the mortgage interest or that my bro in law can claim the renters allowance. She said that this is linked to a RTB registration number.

I have called Revenue to try and get more information as it seems a bit daft that when you are exempt from the RTB registration, that you still need to do it for the tax benefits, but is Ireland... I'll let you know of any developments. Thanks for the responses so far
 
Fran777 said:
By way of an update. I spoke with the RTB today and they confirmed that I do not have to register in this instance unless I want to. However, they said that without registration that I cannot claim relief on the mortgage interest or that my bro in law can claim the renters allowance. She said that this is linked to a RTB registration number.

I have called Revenue to try and get more information as it seems a bit daft that when you are exempt from the RTB registration, that you still need to do it for the tax benefits, but is Ireland... I'll let you know of any developments. Thanks for the responses so far
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LOL. RTB giving tax advice is a new one.
Bear in mind, Revenue routinely disclaim their own officials' tax advice whenever it suits them.
 
Fran777 said:
However, they said that without registration that I cannot claim relief on the mortgage interest
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That's not correct. The tax requirement is to comply with the registration requirements of the residential tenancies act. If there's no requirement to register, then you're compliant.


Fran777 said:
or that my bro in law can claim the renters allowance.
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Where the landloard & tenant are related, the credit is only available for tenancies that require registration with RTB, and are registered.
 
Keep yr rent under the 14k & claim the rent-a-room so long as you are entitled to do so.

Anything else is more trouble than its worth.
 
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