First time buyer Status if appartment rented for 1 year?

Hi, I'm trying to get my head around my tax status as a first time buyer. I bought in 2005, and have been an owner occupier since then, except for a year in 2008 when i went travelling and rented it out. I am now back living in the property again, and will be staying there for the foreseeable future. My queries are:

1. Does this lose me my status as a first time buyer and what are the implications?
2. My tenant claimed rent-relief, and used my PPS number. Do you know if the revenue cross-reference on this?
3. If i dont manage to get my returns in by Oct 31, do you know what the fine is?

Thanks in advance for any info.

Re: Do the revenue cross-reference on rent relief?

missey1977 said:

Hi, I'm trying to get my head around my tax status as a first time buyer. I bought in 2005, and have been an owner occupier since then, except for a year in 2008 when i went travelling and rented it out. My queries are:
1. Does this lose me my status as a first time buyer and what are the implications?
2. My tenant claimed rent-relief, and used my PPS number. If i didn't declare i was away for the year, what are the chances of the revenue cross-referencing this?
3. What fines are there for not completing tax returns on time?

Thanks in advance for any info.

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1. You purchased a property in 2005- Can not be first time buyer twice, not sure I understand question. Maybe cgt implications going forward

2. If house was fully let you should declare income for 2008 and deduct expenses. I dont think you should have claimed relief at source for 2008 mortgage interest.

Chances of Revenue cross-refercing- Might never happen but the tenant did claim rent relief so cant deny never let.

I would be honest and declare it as no declaration could in future down the line if caught you would have to pay interest and penalties and could mount up.

fines for no tax return- interest, court etc

What happens in 3 year time if revenue did a batch check of a number of rent claims in 2008 and cross check you would be caught.


What is point of saving a small bit of tax now and get caught in next few years where you would have to pay a lot more

Re: Do the revenue cross-reference on rent relief?

Yep, i reckon you're right. I was put off by the sheer complications of the whole business. Have now trawled through the revenue's site, and think it's form 11 or 11E that i need to submit.

Do a form 11.

If not paid by 31/10/09 5% surcharge, you have up to 16/11/09 to pay and file online if registered on ros.

Might be easier to print off form and fill in.

Main sections would be your paye employment and rent profit.

If you dont want to go to accountant and do yourself put est info(rent income exp, int p60 etc) on another question and i am sure some posters will help/advise what to put on tax return

There may be an issue though.
You presumably paid no stamp duty as a first time buyer and then rented the property out within the first three years of ownership. The Revenue can claw back the stamp duty because you did this.

Exactly how long had you owned the property before renting it out. If it was 3 years, you might be OK.
I cant remember when the timeframe for this changed from 5 years to 3 years.

I had the property for 2 years 5 months before renting it. However, i think i read recently that the timeframe for clawing back Stamp Duty changed from 5 years to 2 years. Can anyone confirm this?

"Reduction of claw-back period: for purchase deeds dated on or after 5 December 2007 the clawback period is reduced to 2 years. Where a property was purchased before 5 December 2007 but was rented on or after that date, there will be no claw back of stamp duty relief if it is rented in the 3rd, 4th or 5th year of ownership."

Thanks, but am still confused. I purchased before 5 Dec 2007, and i rented my place after 2 years and 5 months. Does this count as "in the 3rd year of ownership"? i.e. as it's within the 3rd year? Or is that classed as within the 2nd year? Do you see what i mean?

When did you start renting it out? If it was before Dec 5th 2007, then stamp duty clawback will apply. If it was after Dec 5th, 2007, then no clawback applies.

I started renting it in Feb 2008 (after owning it for 2 years and 5 months), so does this mean no clawback applies? (was unsure, as mathpecs reply stated that it had to be in the 3rd, 4th, 5th year of ownership)

If you rented it out after Dec 05th 2007 (which is the case) and it was in your third year of ownership (which is also the case as you owned it for more than 2 years), then no clawback of stamp duty applies.

thanks watersprite, and thanks all for replies. Am going to get on with the job of form filling out now. I've been told its a form 12 that i need.

Cheers.

Before you fill out the form you need to make a calculation of your rental profit or loss. Do you know all the things you can deduct for this. Did you register the tenancy with the PRTB?

Yep, am registered with the PRTB. Also, i was only working for 1 month of the year, (as was away travelling for the rest) and so expect to be paying minimal if any tax. The only reason am sending in returns is because i dont want to get fined (especially if i dont actually owe anything), and my tenant claimed rent relief and i was unsure if the revenue tended to cross-reference or not.

With regards to things i can deduct for, i had a look at the revenue site, so have an idea. The main one is the interest for my mortgage, which is roughly the same as the rent i received, so really am not in the money making business here at all. I just wanted my place rented out whilst i was away - unfortunately i still have to do taxes!

Am sure i'll be mailing here again in a day or two with questions on form 12.

Thanks again.