Article: Revenue targets landlords in rental income crackdown

The_Conductor

http://www.independent.ie/business/personal-finance/property-mortgages/revenue-targets-landlords-in-rental-income-crackdown-2839345.html

By Charlie Weston, Personal Finance Editor

Thursday August 04 2011

TAX officials are making door-to-door checks in estates across the country to see if landlords are paying all their taxes.

Revenue officials are focusing on estates where there is known to be a high level of rented properties in the new clampdown on landlords.

They are probing landlords who have buy-to-lets to see if they are making the correct tax claims on their rental returns and to see if they are registered with the State as landlords.

It is part of an overall investigation by Revenue Commissioner officials into the black economy, the Irish Independent understands.

There are fears that many buy-to-let landlords do not register with the Private Residential Tenancies Board (PRTB), accept cash in rent and do not make tax returns.

It recently emerged that the State paid more than €250m last year to thousands of unregistered landlords.

Half of the landlords who get rent supplement payments -- which can be as high as €1,100 a month -- from the Department of Social Protection do not have their properties registered with PRTB, despite being legally obliged to do so.

Tax officials are also checking that the money used to buy the rental property has had the tax paid on it.

Cross-checks

Cross-checks are being made by looking at claims for rent relief from tenants, PRTB registrations, information on rent subsidies from the Health Service Authority and the Department of Social Protection.

Officials are also using data from local authorities on who has paid the second-homes tax.

Anyone who is found to have tax issues is then audited by the Revenue officials, a spokesman said.

"As part of its 2011 shadow-economy project, Revenue is additionally undertaking door-to-door checks of estates where there is a known high proportion of rented properties.

"Information obtained will be assessed in conjunction with other data at Revenue's disposal," the spokesman added.

Also part of the checks being done by tax officials is a probe of the 75pc mortgage interest restriction for residential landlords.

This was introduced in the 2009 emergency Budget.

Previously, landlords had been able to claim 100pc relief on the mortgage interest they paid on the loans for their properties.

The Revenue is determined to improve tax compliance as returns for the Exchequer have plunged. Income tax, the largest source of revenue, is now way off boom-year highs.

Earlier this year it emerged that Revenue officials were making unannounced visits to pharmacies, dentists, schools and charities in a fresh clampdown on potential tax evasion involving employees not properly registered for tax.

The Revenue is doing audits to establish whether all the people working there are categorised correctly for tax purposes.

- Charlie Weston, Personal Finance Editor

Cookie_Monster

Half of the landlords who get rent supplement payments -- which can be as high as €1,100 a month -- from the Department of Social Protection do not have their properties registered with PRTB, despite being legally obliged to do so.

:eek:

So simply stop payments until proof of registration is presented, quick fix there straight away.

ShadowHearth

Omg! Door to door check ups! Sweet!


And there I had lost all faith in humanity!

Can we do that on all the dole huggers please please please!!!

Tehachapi

They're about 30 years too late, why not start implementing policies like this when we're not knee deep in a recession.

ShadowHearth

Tehachapi wrote: »

They're about 30 years too late, why not start implementing policies like this when we're not knee deep in a recession.

because that involves effort? :rolleyes:

Bigcheeze

What are they going to establish by door to door checks ? If someone calls to my door asking for personal information, they'd get nothing unless they're a Garda.

I reckon this is a story planted by Revenue to shock more people in to compliance.

quaalude

Bigcheeze wrote: »

I reckon this is a story planted by Revenue to shock more people in to compliance.

That would be a nice, cheap way to get more people to comply, so no harm in that.

robd

Bigcheeze wrote: »

What are they going to establish by door to door checks ? If someone calls to my door asking for personal information, they'd get nothing unless they're a Garda.

I reckon this is a story planted by Revenue to shock more people in to compliance.

Which is fine to do. However, they'll just flag the address then, which could lead to a personal tax audit on you and anyone else associated with the address which is an awful lot more hassle than giving them info. It's not like they don't carry ID that clearly identifies them.

Revenue have always been regarded by tax professionals as persons not to be dicked around with. They can make life very difficult and unlike a court it's not innocent till proven guilty it's guilty unless proven otherwise.

Bigcheeze

robd wrote: »

Which is fine to do. However, they'll just flag the address then, which could lead to a personal tax audit on you and anyone else associated with the address which is an awful lot more hassle than giving them info. It's not like they don't carry ID that clearly identifies them.

Revenue have always been regarded by tax professionals as persons not to be dicked around with. They can make life very difficult and unlike a court it's not innocent till proven guilty it's guilty unless proven otherwise.

Yeah but if they're calling door to door they'll be speaking to tenants. The tax compliance of the landlord has nothing to do with the tenants.

3DataModem

Bigcheeze wrote: »

Yeah but if they're calling door to door they'll be speaking to tenants. The tax compliance of the landlord has nothing to do with the tenants.

If the landlord is non-resident, it is everything to do with the tenant!

paul71

3DataModem wrote: »

If the landlord is non-resident, it is everything to do with the tenant!

Thats true!

I wonder how many people are aware of the fact that they are legally obliged to deduct a withholding tax from their rent and pay it to the revenue if their landlord is non-resident?

nompere

paul71 wrote: »

Thats true!

I wonder how many people are aware of the fact that they are legally obliged to deduct a withholding tax from their rent and pay it to the revenue if their landlord is non-resident?

And that they are personally liable for the tax if they haven't deducted it from the rent - even if the landlord doesn't actually have a tax liability?

The ombudsman has looked at this a couple of time, and criticised Revenue on each occasion, but the legislation remains unchanged.

mikemac

Rent a room scheme allows you to claim up to ten thousand tax free.

Of course what's often done is the landlord lets the house but keeps a room empty or maybe still gets post delivered there.
So the whole house is rented but Revenue ask questions and the landlord claims they are just renting rooms and still living there

Time for an Ansbacher amnesty maybe, worked last time

3DataModem

mikemac wrote: »

Rent a room scheme allows you to claim up to ten thousand tax free.

Of course what's often done is the landlord lets the house but keeps a room empty or maybe still gets post delivered there.
So the whole house is rented but Revenue ask questions and the landlord claims they are just renting rooms and still living there

Time for an Ansbacher amnesty maybe, worked last time

That trick only works if you don't claim another place as your main residence. You can only have one, and that's the only place you can rent-a-room.

Believe me, the revenue are very good at spotting inconsistencies or multiple main-residence claims!