In that case and "not knowing" anything else, the best advice anyone on here can give is to go and speak to an accountant with a view to preparing a declaration to Revenue. The OP may not be able to afford to do this and to pay the penalties due, but I would contend that they cannot afford not to...oh and it's the law.
I rented out my home without notifying the bank or the Revenue
- Thread starter sandal
- Start date
There is absolutely no evidence of this, bankers have better things to do then look up the PRTB website of rented properies, which is quite a mess. For revenue it is a different matter.
This is exactly what I thought. Where would they even start??
My personal situation is thus...
I have been renting my apartment on and off for around three years. I did not file any tax returns or do any of the registrations. The reason for this was that I got the first time buyers allowance which stipulated that I could not rent the apartment for the first 5 years.
If I had officially rented out the place during the first 5 years I would have had to pay 35k. Not an option. I had no work in Ireland so had to move overseas for work so had no choice but to rent out the apartment. Either that or default on my mortgage.
Anyway all those tenancies went without a hitch.
In 2012 I will have owned the property for over five years so have decided to go legal. I have new tenants form the start of Jan, I have registered with the PTRB, paid the house hold charge and will pay the NPPR when it falls due in March. Also at the end of the year I will make a tax return for the year. ( I will have no liability due to the large short fall I suffer each month).
To be honest I can't see how they can catch me out for those last three years. There is not proof that I had tenants in the place. Unless they look into the ESB. But why would they? If everything is above board this year, why would they delve into the past??
My past situation was not ideal but that was the best I could do. Finger crossed from now on everything will run smoothly.
T McGibney
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A couple of points here.
1. Once a submission is made to the PRTB, the property details are in the public domain. This applies regardless of the poor state of the PRTB website. Who's to say they won't in the future revamp the website or make their database available via other means (perhaps offline) to interested parties?
2. Lenders with tracker mortgages have a direct financial incentive to weasel out of mortgage contract commitments where they can legally do so. If they can prove that mortgage terms and conditions have been broken by the borrower, then they may have grounds to force the borrower onto a variable and/or higher interest rate.
Like it or not, a due diligence exercise of tracker mortgaged properties using PRTB data could be very profitable for a bank, particularly if initiated by 'Fred the Shred' type characters in senior bank management whose sole motivation is the bank's bottom line and their own 'performance' bonuses and who care nothing about the human and other toll that a 'take no prisoners' approach to trackers would force on borrowers.
I'm not saying that this will ever happen, but it is a possibility.
Personally, I think that the PRTB database is an outrageous invasion of privacy and, like Revenue records, should only be maintained on a strictly confidential basis. Otherwise, the data therein are open to be used and misused by powerful vested interests at the expense of ordinary individuals.
No reason except if you come to their attention on another matter and they decide to audit you. They may check bank statements so you may have to come up with reasonable explanations for payments going in for certain periods. If you fail to admit to owning an account then alarm bells will ring.
This business of the revenue "checking bank statements" is pure scare mongering.
Do you have any idea the lengths that revenue must go to to get access to someones personal bank records?? They cannot just call the bank and ask for them. They do do this when they are chasing the big boys and criminals but the thought of them coming after me with the same venom is not something I am concerned with.
serotoninsid
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In relation to the PRTB, those records are publicly available - and a 12 year old could run a search of the complete list for an address in a couple of minutes. Of course, most likely this won't be an issue. However, if any of the banks make a conscious decision to pursue this - then a small team working on this - and checking that list (together with checking the insurance documentation they have on file) would reap dividends for them. Some banks are more aggressive than others and vary in terms of the policies they implement.
However, many AAM'ers will be familiar with just how aggressively NIB pursued clients - in trying their damnedest to force them off tracker rates for investment mortgages.
I don't know how manys work - or have an insight into how likely they are to pursue such a policy but I doubt it's outside the realms of possibility?
However, many AAM'ers will be familiar with just how aggressively NIB pursued clients - in trying their damnedest to force them off tracker rates for investment mortgages.
I don't know how manys work - or have an insight into how likely they are to pursue such a policy but I doubt it's outside the realms of possibility?
mandelbrot
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Um, I think you need to stall your digger there and re-read Elcato's post...
Elcato is talking about a situation where Revenue, for whatever reason, select you for an audit. In the course of which they would certainly ask you to produce your bank statements, no question about that.
Yes they have powers under S.902 / S.906A to seek information directly from third parties, which tend to be invoked in more serious cases, usually where the taxpayer decides to play silly buggers with producing their own records.
(So I think you owe Elcato a teeny weeny apology...
)I rented out, registered with PRTB etc, and even had my insurance company say that they would have to inform my lender when my insurance changed from private to landlord, and I still have no tracker with my bank and never heard anything from them.
I hope that there are just happy that someone is paying their mortgage every month to worry about it.
Well I hope the checking bank statements thing isn't scaremongering cos I'm sorry but the tax dodgers who have posted on here make my blood boil.
There is a legal requirement to register with the PRTB, there is a legal requirement to pay taxes on income, there is a legal requirement to inform revenue if you rent out a property within the stamp duty claw back time limit.
I understand that people have been struggling and desperate times call for desperate measures but it is a kick in the teeth to all of us who have been compliant and who have had to make sacrifices to do so.
Defaulting on a mortgage has personal implications for the borrower. Defrauding the taxpayer has implications for the rest of us. I know the mods don't like us to reference other posts but a check on your other posts Favourite shows this isn't the only non payment of tax issue you've had.
There is a legal requirement to register with the PRTB, there is a legal requirement to pay taxes on income, there is a legal requirement to inform revenue if you rent out a property within the stamp duty claw back time limit.
I understand that people have been struggling and desperate times call for desperate measures but it is a kick in the teeth to all of us who have been compliant and who have had to make sacrifices to do so.
Defaulting on a mortgage has personal implications for the borrower. Defrauding the taxpayer has implications for the rest of us. I know the mods don't like us to reference other posts but a check on your other posts Favourite shows this isn't the only non payment of tax issue you've had.
Can you please tell me what you would have done in my situation?
If you were me then what would you have done. Left the apartment empty and default on my mortgage? I could have walked away from all that negitive equity and sent the keys to the bank in the post and let you the tax payer pay for it but I didn't. I take responsibility for I what borrowed and I am repaying it. That would have cost you the tax payer more that if I did not file a tax return. Besides because of the shortfall I would have no tax liability of those years anyway.
Would you have called the tax office to tell them that you were renting out your apartment during the stamp duty claw back time and duly sent them a cheque for 35k when you had the princely sum of 200 euro in your bank account. Please do tell me what you would have done?
I am doing the right thing now because I am finally in a position to do so, unlike so many many others. I did the best I could in a bad situation I don't lose an ounce of sleep over it.
And while your commenting on my previous posts I have had a tax accountant file returns for the years I have been away and I had little to no liability. But thanks for nosing around. ( you should get a job with the Revenue!!)
You are so naive I cannot believe it.
You shouldn't be worried, there are so many landlords who weave and dodge, but as the years go by the worry gets bigger and bigger and the liability higher and higher. The penalites and interest are horrendous, far higher than the actual tax. As I've posted many times, revenue are in no hurry to catch them, as they know whenthey do the payment will be substantial. There have been quite a few posters on here who are trying to get their affairs in order, mostly because they get older and more worried about the implications. At least they are trying to be tax complaint.
Do you not see why tax compliant tax payers would be annoyed with you?
To answer your questions, you could have sold the apartment, then you would not have been liable for the stamp duty. You choose not to for whatever reason. You could have come to an arrangment with the bank to repay the negative equity, or probably legitimately could have gone bankrupt where you were working.
You also chose to rent it out and not declare the rent, and you did this because you knew you would be liable for stamp duty.
You are incorrect that due to the 'shortfall' you were not liable for tax on rent, not true, but if you had registered with the PRTB you would have been able to offset mortgage interest against rent.
Nevertheless you are trying to get back on track, and that's good. But I'd be worried about your bank accounts if I were you. And there's the little matter of tenants who claim social welfare rent or tax rent relief without informing the landlord. But you may be lucky and fall thru the net.
I knew my tenants, none of them claimed rent relief.
Can you please explain how I was being naive in my previous post??
mandelbrot
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You only know what they've told you. They don't need to inform you if they claim it.
I already flagged how you were being naive in my previous post. I could explain a couple of other ways (besides a rent relief claim) by which you could come to Revenue's attention, but I can't be bothered TBH. Yes you are naive if you think you're in the clear though.
sorry mandelbrot, does this mean that if the net rental income I get after mortgage interest, managment fee, expenses etc is 2K I dont pay income tax?
mandelbrot
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Of course not! It simply means your return filing obligation changes from a self-assessment form 11, to a less onerous form 12 (tax due can be collected through the PAYE system by reducing your tax credits)...
Think about it, if the post you quoted meant what you want it to, there'd be a crazy number of people with 3,173 of tax-free income...