If you are renting property the Rep. of Ireland, particularly in Donegal, but not living in the Rep of Ireland, there is a tax issue which you need to be aware of.
The revenue in Donegal are involved is a pilot project where they have allocated a number of people to identify non-resident land lords and chase them for taxes due on the rental incomes from property in the state.
Revenue use a system called REAP. Which correlates information from allot of different sources and registers like, the Private Residential Tenancies Board (PRTB), Local Property Tax (LPT), & Non Principal Private Residence (NPPR) registers.
The goal of the pilot project is to identify who has property and who has not paid taxes on the rental income.
This process has already started with a number of people already receiving demands for taxes owed. These demands can also include interest and penalties
The latest revenue update lays out clearly how tax is to be paid on rental incomes if the property owner is non-resident in Ireland. It also lays out clearly who is responsible for the deduction of the tax.
The rental incomes are taxed at 20%.
The issue is most non-resident landlords don’t know this is a requirement. Moreover, even if they are not making a profit on said properties it does not automatically mean there is no tax due on the rental income. The other issue is that agents are not making the landlords aware of this requirement.
If the landlord has appointed an agent in the State to collect the rent, then the agent can withhold payment to the value of 20% from the rent and remit it to the revenue. This is not happening.
What to do
Always seek professional advice. Our advice is always to be proactive with Revenue and approach them before they approach you. That way you are on a stronger footing to discuss the issue.
The important thing is to take action. Ignoring the issue hoping revenue will not find you should not be the option you choose, they will find you sooner or later.
If you have already received a communication from revenue on this give us a shout.
If you have questions on this or want more information, please give us a call. We are happy to discuss your situation and recommend the best way forward.
We advise that you seeks professional tax and legal advice as the information given is for guideline only and does not take into account your particular circumstances.
Information is correct as at March 16 but is subject to change.
If you have any questions or need more information please give me a call.
Please Note: Every effort has been made to ensure that the information in this publication is accurate at the time of writting. Advice First Financial accepts no responsibility for any liability incurred or loss suffered as a consequence of relying on any matter published in or omitted from this publication.