Apparently our Landlord is about to have the house taken back, what now ?

Aethan Dor

We've just learned today that our Landlord of the house we've rented for over 3 years is being taken to the Circuit Court soon by his Mortgage lender to repossess the house !

We have a lease until next summer and 2 kids under 2. We're stunned but more so we're curious about a few things.

AFAIK the landlord has resided in the UK since we've been here, we rented thru a local Estate Agent but pay him directly into a bank A/C so he has prob just pocketed our rent all the time and willingly let his mortgage go this way on purpose ! Should we keep paying him rent ?

Will we be turfed out once his lender gets possession of the property ? Should we line up a move now or seek to see out our lease which would suit us much better ?

I hope someone else here can help as I can't have been the 1st tenant in these circumstances since the property bust, thanks

jimmycrackcorm

I'd wait until you hear from someone. It might take a while for any change in circumstances and even then the bank might be happy enough to take rental income in the meantime.

Also as the landlord is not resident you should be withholding tax.

stevedublin

jimmycrackcorm wrote: »

Also as the landlord is not resident you should be withholding tax.

What does this mean?

surpy

Don't take any advice here.
Speak to threshold asap

username123

The tenant is responsible for paying the tax on rent in the case of an absentee landlord. There is something on citizens info, I'll go find it.

Here is the relevant info from citizens info:

Landlords living abroad

If your landlord lives outside Ireland and you pay your rent through an agent, you do not have to deduct tax from the rent. The landlord’s collection agent must account for the tax in an annual tax return.

However, if you pay the rent directly to the landlord (including into their bank account) whether in Ireland or abroad, you must deduct tax at the standard rate (20% in 2013) from the gross amount that you pay. This deduction is not your tax relief - it is tax payable to Revenue from your landlord's income.

For example, your landlord lives in Germany and you pay him/her gross rent per month of €1,000. First, work out the amount of tax to be deducted (€1,000 x 20% = €200). Now deduct the tax due from the gross rent you pay (€1,000 - €200 = €800). The net rent to be paid to your landlord is €800 per month. The amount due to Revenue is the €200 per month that you deducted from the gross rent of €1,000.

Accounting to Revenue for tax deducted from rent

You must account to Revenue for the tax that you deduct from the gross rent. If you fail to deduct tax from rent that you pay directly to a landlord living outside Ireland, this will mean that you (and not the landlord) will be liable for any tax that should have been deducted.

If you pay tax under PAYE, you can account for it by reducing your tax credits and Standard Rate Cut-Off Point. You can notify your local Revenue Office and ask them to arrange this. Alternatively, you can make a tax return - Form 12 (pdf) and pay the retained amount to Revenue.

If you pay tax under self-assessment, you should include the details of your rent on your annual return - Form 11 (pdf). A notice of assessment will then issue to you, showing the reduced credit.

At the end of the year you must give your landlord a completed Certificate of Income Tax Deducted - Form R185 (pdf).

http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html

on_my_oe

If your landlord lives abroad and you don't pay your rent to an agent, you are supposed to retain 20% of the rent and pay it to Revenue - wonderful rule as of course retaining part of your rent is bound to upset your landlord. You read a brief note here -
http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html

When the property is repossessed, the receiver will contact you and provide a notice in writing which will include a new account for the rent. Don't stop paying until the notice is received. They'll probably let you stay but expect an upwards rent review once your lease ends.

The bad news is you'll probably lose your deposit at the end of your lease, as it'll be with the landlord and of course they're unlikely to repay it as they no longer have the property.

I know it's crappy - I've been through the same thing.

Aethan Dor

Thanks so far everyone. Very helpful. I'll prob go see what Threshold can tell us too so.