The RPZ are an absolute disasterFolks rent controls or what we call rent pressure zones in Ireland are heart of the problem not taxes. The problem is that the government can't address either - it is politically impossible for them to do so.
Yes, rent controls always seem to create far more problems than they solve. The primary problem they create is lack of supply - landlords sell up and are not replaced.Agree 100% PebbleBeach2020. RPZs have been a disaster in Ireland and if you look at estate agents reports on where landlords are selling up it is overwhelmingly in cities that are subject to RPZs.
Rent controls have proved disastrous everywhere they have been introduced. A friend recently moved to Sweden with his young family. He bought a house but has been advised to put his nine year old son's name on a waiting list to rent a private flat in Stockholm so he will have one by the time he starts university. Yes folks there is a ten year waiting list for private rented dwellings in Stockholm. There is also a massive black market in private rentals to rent controls are ignored in in this case. Classic insider/ outsider system.
Benefit in kind is only relevant if you are an employee ie. if an employer provided cheap accommodation to an employee, that would be subject to BIK. BIK doesn't exist outside of the employee/employer relationshipJust curious if a tenant who is significantly benefitting from an RPZ rent amount locked into a rate far below the average market rate for the same property, is effectively in receipt of a benefit in kind resulting in a revenue obligation?
For example, if a tenant has an existing tenancy agreement with a historically low rent amount (€900) set prior to the introduction of the RPZ, but where the market rent for the same property is significantly higher (€1,600), is the tenant in receipt of an accommodation subsidy and does this benefit attract PAYE, USC and PRSI, as B
This is a very true.The truth is much simpler - maintaining old houses is a money pit and a task totally unsuited to bureaucratic councils. They literally couldn't afford to keep maintaining them.
Greenbook has clarified that the tenant is not in receipt of a benefit in kind, but what about tenants who stop paying rent and the arrears amount to €,000s. Two recent cases of tenants owing €70,000 and €40,000. Would revenue take an interest in these cases?Just curious if a tenant who is significantly benefitting from an RPZ rent amount locked into a rate far below the average market rate for the same property, is effectively in receipt of a benefit in kind resulting in a revenue obligation?
What basis would they have for doing so?Greenbook has clarified that the tenant is not in receipt of a benefit in kind, but what about tenants who stop paying rent and the arrears amount to €,000s. Two recent cases of tenants owing €70,000 and €40,000. Would revenue take an interest in these cases?
Obviously not a gift though.The only thing I can think that it might be is subject to gift tax eventually ie. after the annual tax free amount and the group c class threshold have been used up
It is a bit tenuous, but if Revenue were to argue this point, I think that it is a 'gift' would be the only avenue open to them ie. a government imposed gift is still a gift. S.40 CATCA 2003 is the relevant section and while 'gifts' of this type (annual use of a property at below market rent) are invariably voluntary, the section does not specify that they must be.Obviously not a gift though.
The letting is at market value, albeit one that has been frozen by legislation.
It's more than a bit tenuous, in fairness.It is a bit tenuous, but if Revenue were to argue this point, I think that it is a 'gift' would be the only avenue open to them ie. a government imposed gift is still a gift. S.40 CATCA 2003 is the relevant section and while 'gifts' of this type (annual use of a property at below market rent) are invariably voluntary, the section does not specify that they must be.
gift
noun
1.
a thing given willingly to someone without payment; a present.
"wedding gifts"
Unfortunately, words in tax law often do not mean what they mean in real life ie. they take on a tax law meaning. 'Gift', 'annual benefit' etc. have their own definitions in the CATCA 2003 and also from case law. So in my view this is a possible argument or if I was Revenue it the one I would take on the basis that it is the only one which has any chance of success. That is all that I am saying here. Can't see it happening anyway, as it would make no sense from a policy perspective.It's more than a bit tenuous, in fairness.
If you can't see it happening, why are you raising it here as if it were a possibility?Unfortunately, words in tax law often do not mean what they mean in real life ie. they take on a tax law meaning. 'Gift', 'annual benefit' etc. have their own definitions in the CATCA 2003 and also from case law. So in my view this is a possible argument or if I was Revenue it the one I would take on the basis that it is the only one which has any chance of success. That is all that I am saying here. Can't see it happening anyway, as it would make no sense from a policy perspective.
It is an interesting observation and is how Revenue think/operate. I have seen it several times before, Revenue realize there is a interaction between laws and suddenly have a rulling which change how tax is applied.If you can't see it happening, why are you raising it here as if it were a possibility?
No, it's pure scaremongering. @Greenbook needs to either cite the definition of a gift that he claims is included in CATCA or withdraw his claims.It is an interesting observation and is how Revenue think/operate. I have seen it several times before, Revenue realize there is a interaction between laws and suddenly have a rulling which change how tax is applied.
Just curious if a tenant who is significantly benefitting from an RPZ rent amount locked into a rate far below the average market rate for the same property, is effectively in receipt of a benefit in kind resulting in a revenue obligation?
For example, if a tenant has an existing tenancy agreement with a historically low rent amount (€900) set prior to the introduction of the RPZ, but where the market rent for the same property is significantly higher (€1,600), is the tenant in receipt of an accommodation subsidy and does this benefit attract PAYE, USC and PRSI, as would the landlord’s obligation where full market rent is charged?
It was simply a comment I made. A poster said that the RPZ benefit could be subject to BIK. I explained that clearly it couldn't as BIK only applies to employees. I then made the comment that the only possibility is gift tax, that it is a rather tenuous argument and that it made no sense anyway from a policy perspective. I never said 100% there is a gift tax liability here.If you can't see it happening, why are you raising it here as if it were a possibility?
(2) A person is deemed to take a gift in each relevant period during the whole or part of which that person is allowed to have the use, occupation or enjoyment of any property (to which property that person is not beneficially entitled in possession) otherwise than for full consideration in money or money's worth. | ||
(3) A gift referred to in subsection (2) is deemed to consist of a sum equal to the difference between the amount of any consideration in money or money's worth, given by the person referred to in subsection (2) for such use, occupation or enjoyment, and the best price obtainable in the open market for such use, occupation or enjoyment. |
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