If landlord doesn't pay his mortgage...

P.K.M.

...can we be thrown out?

Just something that came up this week, and I'm wondering is it something I should be concerned about.

Basically my other half and I moved into the house five years ago. We have three kids. The landlord moved to New Zealand about 18 months ago and there hasn't really been any problems since he left. About a year ago, he came back and arranged with my C.W.O. to have the rent allowance paid directly into his account. I didn't have a problem with this as it saves the temptation to dip into it. So basically every week I just put the balance of the rent into his account.

He was in touch this week about another matter and I have a sneaking suspicion he hasn't been paying his mortgage. The rent allowance and my money is going into his bank account so we're keeping up our end of the deal, but I think he's spending the money instead of paying his mortgage.

If this is the case, and he loses the house, can we be thrown out of the house, even though we've been paying rent?

Thanks in advance for your input.

OU812

Course you can be thrown out. It's not your house.

Your contract is with him, which has absolutely no bearing on his contract or relationship with the lender.

ted1

You need to keep 20% back for the taxman or YOU could be liable

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section21

So if rent is 1000 a month you pay your landlord 800 and then give 200 to the revenue.

amdublin

You pay rent on a monthly basis.

Once that month is over it's over. You're not building up credits to stay there for the future.

I'm really confused with your way of thinking. Can you clarify.

drumswan

amdublin wrote: »

You pay rent on a monthly basis.

Once that month is over it's over. You're not building up credits to stay there for the future.

I'm really confused with your way of thinking. Can you clarify.

Wtf are you taking about? Go read the residential tenancies act.

OP you need to be paying 20% of the rent directly to the revenue.

It frightens me how people can enter into five figure a year annual contracts and know nothing of the legalities surrounding them - on both landlord and tenant side

dharma200

I don't understand why op would pay 20% direct to revenue...

Op, the main thing at risk if the landlord s house is in receivership is that you won't get your deposit back. Read up on all your rights as a tenant. At the end of the day make sure all the rent given is documented.

dharma200

Part four tenancy is in effect. Op google this and find out your rights.

drumswan

dharma200 wrote: »

I don't understand why op would pay 20% direct to revenue...

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section21

lau1247

dharma200 wrote: »

I don't understand why op would pay 20% direct to revenue...

I think it is to do with landlord that live abroad.. see the link ted provided

ted1 wrote: »

You need to keep 20% back for the taxman or YOU could be liable

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section21

ted1

dharma200 wrote: »

I don't understand why op would pay 20% direct to revenue...

Op, the main thing at risk if the landlord s house is in receivership is that you won't get your deposit back. Read up on all your rights as a tenant. At the end of the day make sure all the rent given is documented.

Because they have a legal responsibility too.

The landlord lives outside the state and hence won't file tax returns here so it's taking at source.

murphaph

ted1 wrote: »

Because they have a legal responsibility too.

Correct.

ted1 wrote: »

The landlord lives outside the state and hence won't file tax returns here so it's taking at source.

Incorrect. The landlord is still obliged to file a return on Irish rental income no matter where he lives. In fact if his tenant is deducting 20% and the landlord has the usual expenses then there's a good chance he'll be due some of that 20% back!

ted1

murphaph wrote: »

Correct.

Incorrect. The landlord is still obliged to file a return on Irish rental income no matter where he lives. In fact if his tenant is deducting 20% and the landlord has the usual expenses then there's a good chance he'll be due some of that 20% back!

Just because the ll is obliged, it doesn't mean that he will. If he is not paying his mortgage do you think he would bother with Taxes?

murphaph

ted1 wrote: »

Just because the ll is obliged, it doesn't mean that he will. If he is not paying his mortgage do you think he would bother with Taxes?

You are presuming the LL in this case is not paying his mortgage based on what exactly?

Anyway, Ted, you said:

The landlord lives outside the state and hence won't file tax returns here

I live outside the state and file tax returns in Ireland as I am legally obliged to do. I don't get the automatic presumption that non-resident landlords are all conniving thieves and/or tax evaders. It's wearing really thin. Evading tax on rental income is actually sort of hard to do and easy for Revenue to prove. The property cannot be hidden. The tenant has no reason not to show his lease and or other proof of rent paid to Revenue. It's much easier for your local "trusted" GP to pocket thousands a year in undeclared earnings, but there's no witch hunt of GPs and we don't withhold 20% of our GP's cash in hand fee and send it to Revenue, just in case!

The UK has the same 20% rule BUT they have an opt-out for any landlord who is tax compliant (in my case I have to be as I rent one property under the RAS and the council require a Tax Clearance Certificate every year from me). There's no op-out for tax compliant landlords under the Irish system.

L1011

murphaph wrote: »

It's much easier for your local "trusted" GP to pocket thousands a year in undeclared earnings, but there's no witch hunt of GPs and we don't withhold 20% of our GP's cash in hand fee and send it to Revenue, just in case!

GPs are probably one of if not the most highly Revenue audited professions in the state. They're also subject to withholding tax on payments from insurers and some state bodies.

murphaph

MYOB wrote: »

GPs are probably one of if not the most highly Revenue audited professions in the state.

I don't do this very often but do you have a source for that assertion? Actually it doesn't matter. I doubt Revenue even know what percentage of each of the professions are audited each year.

In any case, auditing or not...a GP in a local surgery could see 40 people a day easily. Let's say a quarter are medical card holders...he takes 30 x €50 from the rest and many people never ask for any form of receipt...are you really telling me that all our GPs are reporting all 30 payments, and not say, 28 and pocketing the hundred quid tax free?

I didn't and don't want to accuse all doctors of being tax evaders. Just like with most landlords I'm sure most GPs are tax compliant. The point I was making is that it is obviously easier to evade tax on a cash in hand service like the local GP offers (or any cash in hand service like your local barber or hackney cabs), compared to a tenancy agreement where there's a paper trail (a non-resident landlord will need to be paid into his bank account-not in cash!!) and a fixed asset that can't easily be hidden.

Given that it is obviously easier for a GP to pocket cash, why no burden on the GP's patients to deduct 20% up front and send to Revenue, just like tenants of non-resident landlords? Answer: because in both cases it's patent bloody nonsense and shouldn't happen. There should be no onus on tenants to withhold tax. It's a stupid system. In many cases the tenant may not even be aware that their landlord has left the country and could still fall foul of this stupid piece of the tax code.

L1011

murphaph wrote: »

In any case, auditing or not...a GP in a local surgery could see 40 people a day easily. Let's say a quarter are medical card holders...he takes 30 x €50 from the rest and many people never ask for any form of receipt...are you really telling me that all our GPs are reporting all 30 payments, and not say, 28 and pocketing the hundred quid tax free?

Try 30-35 of them are medical card holders. Roughly half the country has a medical card and medical card holders attend their GP significantly more often than private patients. The amount of private income a GP makes is always wildly over-estimated by patients and the media.

Also, if you don't think that appointment books, prescription records etc are a paper trail... what do you count as one? Well over 90% of GP practices are computerised to some extent and the few I'd ever encountered that didn't even keep paper appointment records would have private patient numbers you could count on one hand - rural satellite surgeries which only operated one or two days a week for the patients who didn't have a car, etc.

wmpdd3

In the OP's case shouldn't the CWO deduct the tax as they pay the variable, the OP has to pay their contribution to the rent, it's non negotiable.

also reposition take a long time and even if the house is taken the bank may continue to take rent as a receiver.

so OP, it could be a long time from confirmation of an issue to when you'd have to leave.

murphaph

MYOB wrote: »

Try 30-35 of them are medical card holders. Roughly half the country has a medical card and medical card holders attend their GP significantly more often than private patients. The amount of private income a GP makes is always wildly over-estimated by patients and the media.

Also, if you don't think that appointment books, prescription records etc are a paper trail... what do you count as one? Well over 90% of GP practices are computerised to some extent and the few I'd ever encountered that didn't even keep paper appointment records would have private patient numbers you could count on one hand - rural satellite surgeries which only operated one or two days a week for the patients who didn't have a car, etc.

I'm not going to name my previous GP in Ireland but he runs a large practice in a town not far from where you live and I never once made an appointment to see him. I went during surgery hours and waited with the others in the waiting room-no names taken. Many times there was no prescription and to be honest, do you think Revenue have ever used prescriptions to prosecute tax evasion by GPs? How might that even work in practice? If push came to shove and no receipt was issued (as was ALWAYS the case in my experience of my own Irish GP) it would be the GP's word against a patient (who probably isn't bothered either way) that money ever changed hands for the consultation...GP could claim he did the patient a favour.

Anyway, this thread isn't about GPs. If it makes you feel better I can talk about some other cash in hand service that doesn't require customers to withhold 20% of the fee and forward it to Revenue...your local barber...is he heavily computerised?

The point is...Non-resident landlords get unfairly singled out by an archaic piece of tax code that also unfairly places a burden on their tenants, making them de facto tax collectors.

murphaph

wmpdd3 wrote: »

In the OP's case shouldn't the CWO deduct the tax as they pay the variable, the OP has to pay their contribution to the rent, it's non negotiable.

also reposition take a long time and even if the house is taken the bank may continue to take rent as a receiver.

so OP, it could be a long time from confirmation of an issue to when you'd have to leave.

An interesting conundrum for the CWO! I have one property let under RAS and the council does withhold the 20% and furnish me with an R185 in Jan/feb each year. In the case of RS it's a bit weird but on the face of it yes, the CWO should be withholding 20% of what they pay and the tenant 20% of what they pay and both parties should furnish the landlord with an R185 and and and...yeah, like this makes any sense!

L1011

murphaph wrote: »

and to be honest, do you think Revenue have ever used prescriptions to prosecute tax evasion by GPs?

I know of cases where they have used consultation and prescription records as "proof" of fees taken. Considering that I had to produce the actual reports from the PMR system for them.

My local barber uses a cash register, as it happens.

murphaph

That's not what I asked.

Anyway, if Revenue take such a keen interest in GPs (as you assert) then we can safely assume they have their reasons!

L1011

murphaph wrote: »

That's not what I asked.

What did you ask then? Because that more looks like "I don't like that answer" to me.

murphaph wrote: »

Anyway, if Revenue take such a keen interest in GPs (as you assert) then we can safely assume they have their reasons!

Non-resident landlords get no more or less attention than Revenue have reason to believe they need either. You were the one who tried to use GPs as a deflection excuse.

gaius c

ted1 wrote: »

Just because the ll is obliged, it doesn't mean that he will. If he is not paying his mortgage do you think he would bother with Taxes?

Actually, an attitude prevalent amongst the more dishonest landlords is that you can stiff the banks and regulatory bodies (like the PRTB) as much as you like but you mess with the taxman at your peril.
That said, the landlord mentioned in the OP is abroad so who knows what he's up to.

OP
You don't really know and you won't find out unless receivers turn up at your door. It's a poor state of affairs that some landlords are now expecting to see bank statements from prospective tenants but those tenants have no way of knowing the landlord is solvent.

murphaph

MYOB wrote: »

What did you ask then? Because that more looks like "I don't like that answer" to me.

I don't really care about the answer tbh. I was only using GPs as an example of a cash in hand service-could have picked any other one. Computerisation is not compulsory. Issuing receipts to private patients is not compulsory. Recording appointments is not compulsory. Prescriptions are not always issued as they aren't required for many conditions. In short, a GP who is intent on fiddling his books won't do anything that will leave a paper trail and the paper trail is avoidable on a selective basis. A non-resident landlord cannot hide the paper trail or hide the property the tenant is residing in or hide his ownership of that property.

Do you think all barber shops declare all their income?

Do you think all GPs declare all their income?

Do you think all non-resident landlords declare their income?

L1011

murphaph wrote: »

I don't really care about the answer tbh.

About all I needed to hear.

Revenue have measures to reduce tax evasion. You're whimpering about one and seem quite displeased to find out that others actually exist.

mickdw

MYOB wrote: »

Try 30-35 of them are medical card holders. Roughly half the country has a medical card and medical card holders attend their GP significantly more often than private patients. The amount of private income a GP makes is always wildly over-estimated by patients and the media.

Also, if you don't think that appointment books, prescription records etc are a paper trail... what do you count as one? Well over 90% of GP practices are computerised to some extent and the few I'd ever encountered that didn't even keep paper appointment records would have private patient numbers you could count on one hand - rural satellite surgeries which only operated one or two days a week for the patients who didn't have a car, etc.

My local gp was no 2 on the list of payments for medical cards in the whole state so a massive portion of medical card holders attend his practice. Having said that, he without fail had a drawer bulging with cash each day. He doesn't operate an appointments system. I'm not saying he evades tax but for an auditor to track all these cash payment is an impossibility.
Even if they somehow managed to track the number of persons attending, they couldn't know what he charged. He has on occasion been known to take no money or say 10 for signing something, other times he charges the full fee for a 30 second visit. Receipt only given If asked for so not traceable.

The_Morrigan

Folks this is the accommodation and property forum...what in the name of god have the majority of posts in relation to GP tax returns got to do with the OP?

Get back on topic.

murphaph

Deleted

Carawaystick

murphaph wrote: »

There should be no onus on tenants to withhold tax. It's a stupid system. In many cases the tenant may not even be aware that their landlord has left the country and could still fall foul of this stupid piece of the tax code.

You're right, it is impossible for a tenant to always know their landlords residency status.
I bet the revenue have lost cases in court where they wrongly decided someone's residency.

Even in the OP's case, How is the OP meant to know when the ll became non-resident?

P.K.M.

Thanks for your reply folks. I'll start looking around the area for alternative accommodation to see what's out there, just in case.

Cheers.

ted1

murphaph wrote: »

You are presuming the LL in this case is not paying his mortgage based on what exactly?

Anyway, Ted, you said:


I live outside the state and file tax returns in Ireland as I am legally obliged to do. I don't get the automatic presumption that non-resident landlords are all conniving thieves and/or tax evaders. It's wearing really thin. Evading tax on rental income is actually sort of hard to do and easy for Revenue to prove. The property cannot be hidden. The tenant has no reason not to show his lease and or other proof of rent paid to Revenue. It's much easier for your local "trusted" GP to pocket thousands a year in undeclared earnings, but there's no witch hunt of GPs and we don't withhold 20% of our GP's cash in hand fee and send it to Revenue, just in case!

The UK has the same 20% rule BUT they have an opt-out for any landlord who is tax compliant (in my case I have to be as I rent one property under the RAS and the council require a Tax Clearance Certificate every year from me). There's no op-out for tax compliant landlords under the Irish system.

Bit of a chip on your shoulder?

The_Morrigan

ted1 wrote: »

Bit of a chip on your shoulder?

Cut it out...that is not constructive to the OP.