1st time Landlord mid '10 not registered with PRTB & not paying tax - consequences?

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Rupert1

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I bought my first house in Tipperary in the boom and last summer I lost my job and had to move back to my parents house in Laois. I decided to rent out my house as I was left with no other option.

Last Summer, I rented it out to two tenants who have been in the house ever since. I had never heard of the PRTB until now - hence my reason for not registering with them.

I don't pay tax on the rental income as the rent I am receiving doesn't even come close to covering the mortgage and I am in serious financial difficulties as I am not working at the moment and have no income.

After doing some research online I am quite nervous, especially because the tenant rang me today saying he was applying for Rent Relief.

What consequences will I have to face?
 
You don't need to panic too much on the tax front...the 2010 tax return is due in Autumn 2011. However you are wrong in assuming that just because the rent doesn't cover the mortgage you won't have to pay income tax on it. You are taxed on the entire income less a deduction for interest on the mortgage (which is being reduced), wear and tear on fixtures and fittings and certain expenses associated with the property.

The tax you do need to pay is the NPPR tax of €200 per year, they charge a late fee per month delay in paying.

You do also need to register with the PRTB, again there is a penalty fee for registering late.

Not that I'm pointing you away from AAM, but www.irishlandlord.com has a lot of information for novice landlords. Do try to get your house in order regarding these obligations, the fines for non payment of taxes/PRTB are serious. I don't mean to scare you, but you should probably talk to MABS to help you deal with your financial problems including these.
 
You are right to be nervous but lucky that you're in time to sort it out. Register with the PRTB today, if you are not registered then you cannnot claim mortgage interest relief.

Revenue are checking the tenant's who claim rent relief against properties where no rent is declared.

If you haven't been paying the NPPR there are penalties built into it so that it doesn't make sense not to pay it.

Why don't you sell the house instead of renting it if the rent doesn't cover the mortgage.

How are your subsidising the mortgage if you have no income. Are you not getting some kind of dole.

You should do the money makeover thread to help you sort out your finances.

You're lucky you've started to realise the implications of what you're doing so soon after renting. Better to sleep easy than have nightmares.
 
If the house was your PPR and only became a rental property last summer, then there is no NPPR liability for 2010.

As things stand you will have a liability for 2011, to avoid penalties pay it by 30th June.

When do you become liable to pay the charge?
As set out in the Local Government (Charges) Act 2009, liability to pay the charge is determined on the basis of ownership of the property in question on a single day each year. This date, which is called the "liability date", is 31st July for 2009 and is 31st March in 2010 and future years. The charge must be paid within three months of the liability date (31st October in 2009 and 30th June for 2010) in order to avoid late payment charges.
https://www.nppr.ie/Faq.aspx#fk13
 
It is not relevant in this case but for any future tenants,rent relief was abolished on 7th December 2010
 
Thanks for the replies.
So I can't be penalised then?

I can't sell my house because the sale money would not cover what is owed to the bank!
 
Rupert1 said:
Thanks for the replies.
So I can't be penalised then?

I can't sell my house because the sale money would not cover what is owed to the bank!
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The penalties could be small..delay on the NPPR if it applies, and the late PRTB registration fee. The issue of tax relief at source is a bigger concern now.
 
Rupert1 said:
I can't sell my house because the sale money would not cover what is owed to the bank!
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Have you discussed it with your bank, would they allow you to sell and pay back the negative equity as a loan for example.
 
get that stopped asap- are you on a tracker mortgage? if so; is their anything in your agreement that you lose it, if renting the property?
 
Ok, so I have filled out my PRTB form and I will be submitting it.

What else do I have to do now?
 
As the property it is not your principal private residence you are not entitled to mortgage interest relief at source and you should advise your bank accordingly.

Obviously this will result in the bank becoming aware that you are renting the property on a commercial basis so you need to understand the potential implications this may have on the terms of your mortgage.

Do you have appropriate insurance cover or have you left the your policy unchanged as if you were living in the property yourself?

Whose name are the utility bills in?
 
No problem, You can back date the PRTB but do this on line and immediatly. No need to registor if you can prove that you live there . Get some of your mail sent to this address. Also in this case If the rent is less than €10K I think you have no tax issue but check this on Revenue. Don't go near the bank without seeking advise first.
 
mlocmloc said:
No problem, You can back date the PRTB but do this on line and immediatly. No need to registor if you can prove that you live there . Get some of your mail sent to this address. Also in this case If the rent is less than €10K I think you have no tax issue but check this on Revenue. Don't go near the bank without seeking advise first.
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OP has already confirmed that he does not live there
 
I still have mail going to this address so I can prove that I still live there (e.g. car insurance, etc.)

Also, my house insurance cover has not been switched so it still looks like I live there.
 
But will your house insurance cover you if anything happens and the insurance company or their assessor find out you have not been living there. Worse still will they cover you if something happens to one of your tenants or a visiting guest and they take action against you for damages?
 
Rupert1 said:
I still have mail going to this address so I can prove that I still live there (e.g. car insurance, etc.)

Also, my house insurance cover has not been switched so it still looks like I live there.
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I don't mean to sound sanctimonious but that's just plain old fraud. If you don't live there but try to show you do in order to dodge your tax liabilities you are defrauding the exchequer. As has been pointed out your tax liabilities should be zero or close to it so it’s probably not even worth it.

Take Bronte’s (good) advice;
You should do the money makeover thread to help you sort out your finances.
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purple said:
i don't mean to sound sanctimonious but that's just plain old fraud. If you don't live there but try to show you do in order to dodge your tax liabilities you are defrauding the exchequer. As has been pointed out your tax liabilities should be zero or close to it so it’s probably not even worth it.

Take bronte’s (good) advice;
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+1
 
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