Getting out of being a landlord or not

E

elainem

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Just wondered if lanlords are considering getting out of property letting due to property taxes, PRTB, second home charges etc.?

Also, what do people think the property charge will be? Will it be a percentage of the property value, e.g. 2.5%?
 
LLs are not generally a happy lot nowadays. But an increase in property tax need not be a great cause if the LL starts now to advise tenants that there will be an icrease in rents next year. I've done so already and told each of them that due to various increases imposed on me I have to pass pon some of them.

Now, I think i can get away with increasing rent because there is ,in Dublin ,a greater demand for rental accommodation than for years -and rents are edging upwards. And I know several landlords in my main area who are going to increse rents due to never ending charges.

So, whilst we are being stung in ever direction and are always the villains in Irish society, there is a glimmer of hope ,at least temporarily, that we can recoup some of the recent extra costs.

I regret I don't know much about the rental market outside Dublin. Does anyone know if there has been an increase in demand and rents in other areas.
 
I recently advised my Mgt Agenr that my tenants would have to be told that rents would have to be increased if additional charges and costs associated with the property occur. I asked him to consider inserting this in the leases. I suppose this strategy will only be operable, if every LL does the same. I believe that is fair and reasonable, and in the same mould as airlines introducing fuel charges to hedge against unforeseen fuel price movements.

As a LL, a real concern would be if they reduce allowable interest down from 75%. As it is, I don't understand why, a LL can't write off all his interest on acquiring an asset, while say a farmer, or other small business owner, can write off all interest on loans associted with acquiring assets, including land. The curtailment of relief to 75% has resulted in many LL's having to pay tax, on what is at best break-even, or in some cases an operating loss.

I realise the point was to increase the tax take, but changing tax codes/allowances to create a profit for tax purposes for a small segment of tax payers is somewhat unfair, if not unprecedented. Please feel free to correct me if I have got that wrong.
 
oldnick said:
. But an increase in property tax need not be a great cause if the LL starts now to advise tenants that there will be an increase in rents next year.
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What was interesting in the link to the landlord's website was the fact that they were separating rent from charges. Therefore you only pay tax on the rent, in your case if you increase the rent to cover the charges you have to declare and pay tax on all of it. But you still have to pay the charges which are not tax deductable. Something to think about.

In my own situation I never increase rent when there is a sitting tenant. Though I've had to reduce on occasion. Not sure that tenant's can pay more, they are having higher taxes and the cost of heating, petrol is rising, plus food too seems to be increasing leaving people with less disposable income.
 
I'm not sure that one can seperate the taxes/charges from the "main rent" for Revenue purposes.
Revenue want to know the total collected and , as regards the seperate expences, will decide what is deductible (as we know they say NPPR is not).

But advising tenants verbally or in writing that govnt imposed charges/taxes will be passed on to the tenants seems eminently sensible. Obviously decent notice must be given.

Raising rent is something that I also have never done with sitting tenants -and like Bronte have reduced it for them (mainly because they saw rents declining 2007-10).

Unfortunately,like the tenants, I have to pay higher taxes, fuel, heating etc. Indeed, my rental income has declined considerably -as well as the value of the property.

In one way tenants are lucky -they escaped the horror of losing half the value of one's property asset. And they pay nothing whenever something breaks down - whether it's a boiler or a microwave.

I've absorbed the 100 property charge and the 200 NPPR -but if the property charge/tax increases further then -without a penny extra going to me - I'm increasing the rents.

I'd encourage every LL to do the same - with the proviso that tenants are properly informed in good time and that they are in every other way fairly treated.

P.S. In U.K. -inc. Northern Ireland - it is the occupant who is liable to pay. In France it is also the occupant who is liable to pay the tax habitation.
 
oldnick said:
P.S. In U.K. -inc. Northern Ireland - it is the occupant who is liable to pay. In France it is also the occupant who is liable to pay the tax habitation.
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...and in Germany the landlord is legally permitted to pass the cost of his Grundstuer (property tax) straight on to the sitting tenant. He is also allowed to pass on all costs associated with providing services to the dwelling.

I, as a property owner here, get a bill from the local authority for bins, water, waste water, roads, parks etc. which (if I were a landlord) would all be passed straight on to the tenant. Only costs like insurance on the property have to be absorbed by the landlord as it's his asset that he's insuring.

Rents are controlled by law (max percentage increases per year generally with limited exceptions) but the landlord can and does pass on the above costs beyond his control straight to the tenant. This is standard practice here. Tenants don't expect the landlord to absorb these costs.

In Ireland it's really despicable. not only are you as the owner the chargeable person, you're not even allowed to deduct these costs when calculating net profit! Pretty damn cheeky, especially when coupled with the stupid 75% limit on mortgage interest relief (also 100% in Germany, UK etc.)

For a state that can't/won't provide a fraction of the social housing needed and so heavily dependent on the private rental sector, Ireland seems intent on driving landlords out of the "business". I think the state will rue the day it decided that landlords were the bad guys.
 
What has any of this got to do with my post?

The UK is very similar to Ireland in terms of home ownership rates and landlord/tenant law. The tenant is liable for the Council Tax there as well which is essentially a property tax and services charge rolled up into one (they have no rates on domestic houses either any more).

As for your post "people in general only buy retirement cottages" well I don't know what to say except it's a load of nonsense. German home ownership stands at 43% at last count as is RISING as Germans begin to fear inflation again. More and more of my own colleagues are moving towards home ownership in fact.
 
Please don't post single links and quotes from them as some sort of answer. Yes, there are huge regional variations but nationally the figure is 43% home ownership in Germany. It's app. 80% in the UK/Ireland and the tendency in Germany at present is towards home ownership (be that good or bad, it wasn't a point I was debating and has really nothing to do with this thread)
 
cashier said:
. In Ireland the law in relation to renting and tenancy is as archaic as the hills, there is no security for tenents and much needs to be done to modernise the exisiting system.
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You do realise that us landlords would love to have security of tenancy for our tenant's. No written lease in Ireland is worth the paper it's written on. If we had the security of German landlords the state of many properties would improve overnight. I would love to invest more in my properties, but as I've basically no rights I cannot improve too much for fear of damage and worse.

Anyway as landlords seem to be the enemy and the government seem hell bent on punishing us as the easy target bad boys all I can see is rent rises as more and more landlords get out of the business, and very few new ones to replace them.
 

+1.
 
All costs associated with the rental of the property should be taken into consideration in the rent being charged. When you go buy something in a shop, you don’t care how much of what you pay goes to tax, profit, leases etc. you just want to know how much you have to pay. Like most things, rent is based on supply and demand.
 
Looking over these posts plus others on other websites I'm sure that it's time for LLs to be more confident about asking for rent increases. Not out of greed but to cover ever rising costs, including those damn taxes and charges.

Of course, if rental demand was low then I wouldn't be so bullish - but in Dublin at least there is a great shortage of decent rental property. Looking at the Daft/myhome websites I recently realised that i'm much cheaper than most LLs with similar properties. This knowledge, combined with the advent of extra taxes, has made me raise rents a little. Not one tenant said they'd move out (mind you, I'm sure they checked around before agreeing to the rent increase !) .

Considering ...
-we've lost so much on the value of our properties,
-most of us are getting less rent than in 2006
-govnt never ending taxes,charges,disincentives against LLs....
...... NOW is the time to restore rents to a level that makes letting property worthwhile.

Anyway, that's my political party broadcast on behalf of downtrodden LLs.
 
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Couldn't agree more tbh.

I am also the cheapest in D15 for 3 bed semi d property (only have 1 residential property in Ireland let) or at least there are only 2 similar properties looking for as little as me, the rest are all at least 50pm more expensive (I know daft asking prices leave room to negotiate in them, but not that much).

I'm thinking a 25pm increase just to cover my increasing costs from January is the order of the day. Will monitor daft closely and proceed from there. Tenants have to bear some of the cost of these taxes as well IMO, though I'm sure they think we're all minted. If not, then it'll become more and more attractive for me to sell up and get out of residential letting in Ireland altogether. I've been lucky so far with tenants and I know it, one chancer and it could be disastrous (been there done that with some overholding commercial tenants-don't want it again!).
 
Good luck Murphaph. It's more difficult for LLs like you and Bronte (she doesn't live next door does she ?) living abroad than for me to raise the rent. Tenants see me several times a year ,ring me direct etc. One gets a better feel and knowledge than if one's far away.

I have two places further from home that local mngt companies deal with - and it was those two places which proved more difficult. I was an anonymous landlord (doubtless rich and greedy!)not the friendly,helpful albeit eccentric LL that my nearer tenants know.
 
Cheers Oldnick, Yeah I think I know what you mean. I know my tenants as they are in situ several years now and I was still in Ireland when they moved in and it is managed by a family member (thank God) who maintains the contact.

Have a good relationship with the tenants in there. They are good with the rent, no messing, but I'm good to them too, any problems are sorted promptly for them and they are paying at the lower end for the area. Don't want to fleece anyone, but don't want to be covering all the new increases myself when rents seem to be nosing up there.
 
Another blow to LLs - at least those living in Ireland- in todays Sunday Times (which, incidentally, has a decent article by our guru Brendan Burgess)...

"LLs to be targeted in forthcoming Budget .. PRSI to be applied to rental income ... "etc

Does it ever stop?
 
If they're going to apply PRSI, doesn't that mean that one gets social welfare entitlements. All these proposals are the governemt sending out feelers.

Anyone able to scan the article as one cannot get it online and I've only got the international version of the Times.
 
Bronte. i chucked ST in paper bin this a.m. and when i saw your post went running back to it (just for you!) but it had gone..

Anyway, it was short article and in the meantime I realised that it didnt say anything different to what noonan had already stated in last years Budget -that from 2013 PAYE workers letting property would pay 4% PRSI on the rental income.
Those on self -assessment ,like me, already pay it.

Indeed, I remember feeling aggrieved when i found out last year that PAYE people letting proprty had escaped the 4% PRSI on rental income.

So, from my point of view there is no increase and , to be selfish ,I'm glad that everyone in ireland will now pay it.

I don't think that should affect overseas residents but it is worth asking our gurus like Mandelbrot ,McGibney or others if it does affect you -and whether you are entitled to SW benefits because of it. Out of my depth on that one.
 
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