Tax on 2nd property

ticn99

New Member
Messages
3
I ended up as an unexpected landlord when the economy crashed. I bought a house for a family of 5 and my 2 bed apartment never sold,
I've never declared tax on the rental. If I was to declare it now would I have to pay back tax on it or just start paying from now?

Thanks
 

dublin67

Frequent Poster
Messages
235
To be technically correct you should file tax returns for all years. You may be surprised to find out that you didn't make that much of a taxable profit in the first instance. You'll be able to deduct to the management charge, estate agent fees for rental (if used), interest, life cover on your mortgage and a few other things. You may wish to get an accountant to prepare the first one or two years and then copy it yourself for years after that. You should also be able to deduct the accountants fees.
 

dublin67

Frequent Poster
Messages
235
Totally agree with Fergal19. If you haven't filed tax returns you can submit them in one go. If you have (with no rental income declared) then you are looking at an unprompted voluntary disclosure. Best to talk to an accountant in my view.
 

Luternau

Frequent Poster
Messages
893
You mentioned the getting caught with the second property when the economy crashed. How are you fixed with the NPPR charge? If you are not compliant from day one, a significant sum is now due and there is nothing to offset this against like expenses etc.
As per other posters, you need to sort this all out as soon as you can.
 

ticn99

New Member
Messages
3
Thanks for all the advise...
I'm aware I was wrong in not declaring but now my fear is, it's been rented out for 10 years

By self declaring is there anyway of limiting the penalties to say; 3, 5 years or has revenue any standard in how hard they hit you?

Most of that 10 year period the rent wasn't covering what we had to pay in mortgage so I guess subconsciously we decided the fact we were barley able to afford if we didn't pay any of the relevant taxes we should have during the period

Any suggestions on specialist accountants that have experience in dealing with such a mess?
 

cremeegg

Frequent Poster
Messages
3,017
If you want to become compliant, you will have to make a return for every year the property was rented, to just address a few years would be very foolish. If Revenue asked questions, you could be looked at as someone who had made a false declaration, rather than someone who was late with their returns. If you go to confession better make a full confession.

If you were making substantial capital repayments on the mortgage, you could have been making large profits even though the cashflow from the property was negative. On the other hand rents 10 years ago were low, so perhaps the profit wasn't large. It is impossible to say without much more info.

The NPPR is possibly your biggest issue. The penalties were draconian. However AFAIK there is a time limit on these. That us the first issue you need to understand before making any declaration.
 

Feemar5

Frequent Poster
Messages
293
The time limit is 12 years from the date the first charge became due. Regarding the rental you can only claim the interest you were paying on the mortgage against the profit - are you registered with PRTB? You need professional advice and with Revenue its best to be straight but you need to be advised as to what you can claim for etc., Good luck.
 

misemoi

Frequent Poster
Messages
122
Get your bank to send you all your mortgage statements for the period. Gather any evidence of expenses on the property, ie charges on credit card, receipts for maintenance, management fees. Gather any account statements where the rent was paid to. Then find an accountant to help you to work out your tax owed and who will deal with Revenue on your behalf.
 

cremeegg

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Messages
3,017
The time limit is 12 years from the date the first charge became due.
This is regarding the NPPR. So if you stay quiet for a further 2 years that falls away.

Likely to be the biggest bill if you are caught for it.
 

Luternau

Frequent Poster
Messages
893
This is regarding the NPPR. So if you stay quiet for a further 2 years that falls away.

Likely to be the biggest bill if you are caught for it.
I don't agree with any advice that says if you stay quiet you may avoid having to pay arrears charges for a NPPR*. Everyone (including the OP) that owned a second property at the time the charge was in force, was liable to pay this.

*the additional charges for late payment were excessive, but thats not the point here.

They should also have known the obligation to file a tax return for extra income, but chose not to.

The advice I would give them is to get an accountant and regularise their affairs to avoid additional penalties arising from an audit. Depending on the interest rate, they may not have that much tax due.

As to how they have managed to get away with this for so long is dismaying. How much else tax is being forgone?
 
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Feemar5

Frequent Poster
Messages
293
I think Luternau's comments are a bit harsh - the penalties for the non payment of the NPPR are draconian and in many cases people were not aware that it was due. . I am aware of someone who inherited her mother's house in Ireland but she lived in the UK and was not aware of the tax and no communication from the council was sent to her mother's address (she had post forwarded ) and she had to pay €7500 when she sold the property. Regarding the income tax that is a different story .
 

Luternau

Frequent Poster
Messages
893
I agree the penalties are harsh, especially for those that emigrated, but if you lived In Ireland, penalties were easily avoided by paying the €200 p.a charge. Reading the OP, I have no reason to believe they emigrated. If they did, they have my sympathy on the NPPR arrears charges.
 
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