3 years renting and no lease

venomousfrog

Hello, I was hoping someone might be able to advise me on my current situation.

In 2014 me and my wife and 2 kids moved out of Dublin because we could no longer afford to pay rent. We looked for somewhere outside Dublin about 30-40 minute drive , we settled on Port Arlington. We found a great house which was owned by a family who moved to Australia to start a new life there. As usual we paid our 1st months rent and deposit.

The landlady told us there would be no lease in place, but told us that they had no plans to come back and were happy for us to stay as long as we wanted. Now, we were paying 575pm, after 1 years that went up to 600pm. We were quite happy with that.

Rent was always paid on time and we like to think we have looked after the house very well.

Last week the landlady contacted me to tell me she and her family would be visiting and would like to call in to see us. She explained that she would not be checking anything and wanted to get something from the attic. I agreed.

We have never met the landlady and always dealt through email and text messages.

Now, the recent increase in rent has driven similar properties in the same area up through the roof. from 575pm in 2014 now to over 850pm in 2016.

We have never bothered the landlady for anything , if it break we fix or replace it, if it needs painting I do it etc.

Im worried she will land at my door (expecting her this evening) to tell me she is putting rent up to match the rental price in the same area. I would simply not be able to stretch to 800/850 if she asked.

As there is no lease in place (we are going into a 3rd year in the house) can she impose such an increase or ask us to leave ? What are my rights and how should I approach the situation

Thanks for your time and all replies will be greatly appreciated.:)

runawaybishop

You have automatic part 4 rights, lease or not. When exactly was the last rent increase?

venomousfrog

runawaybishop wrote: »

You have automatic part 4 rights, lease or not. When exactly was the last rent increase?

Hi, thanks for your reply. it was last June, it went up 25euro, from 575pm to 600pm. Can you explain Part 4 rights ?

runawaybishop

venomousfrog wrote: »

Hi, thanks for your reply. it was last June, it went up 25euro, from 575pm to 600pm. Can you explain Part 4 rights ?

Rent can only be reviewed once every 2 years, you are fine for a while yet.

Part 4 info here- http://www.citizensinformation.ie/en/housing/renting_a_home/types_of_tenancy.html#lef263

You should read up on this to ensure you understand your rights and obligations.

Michael D Not Higgins

venomousfrog wrote: »

Hi, thanks for your reply. it was last June, it went up 25euro, from 575pm to 600pm. Can you explain Part 4 rights ?

Since you had an increase last year, you cannot have another increase until June 2017.

Part 4 rights give security of tenure and apply after 6 months of a tenancy and in 4 year cycles. These apply with or without a lease and include the reasons a landlord may give notice of termination. They can't just terminate the tenancy for any reason, except during the first 6 months of a tenancy.

snubbleste

If you pay the landlady directly, you are liable to withhold 20% of the rent and give it to Revenue

venomousfrog

snubbleste wrote: »

If you pay the landlady directly, you are liable to withhold 20% of the rent and give it to Revenue

Hi, yes its paid directly into her bank every month. To be honest Im not sure if she is even paying the mortgage with it, I never once received any post or correspondence with her name on it. I'm afraid to ask !:(

debabyjesus

venomousfrog wrote: »

Hi, yes its paid directly into her bank every month. To be honest Im not sure if she is even paying the mortgage with it, I never once received any post or correspondence with her name on it. I'm afraid to ask !:(

It's you who becomes liable for the tax if the landlord is living abroad. If you're paying €600pm to her you should be withholding €120 each month and paying it directly to the revenue.

Mrs OBumble

venomousfrog wrote: »

Hi, yes its paid directly into her bank every month. To be honest Im not sure if she is even paying the mortgage with it, I never once received any post or correspondence with her name on it. I'm afraid to ask !:(

Not receiving anything is good - if you were getting letters for her, that would be a problem.

Chill the beans, and don't fret about what's going to happen until it happens.

runawaybishop

venomousfrog wrote: »

Hi, yes its paid directly into her bank every month. To be honest Im not sure if she is even paying the mortgage with it, I never once received any post or correspondence with her name on it. I'm afraid to ask !:(

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% at present) 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.

http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html#le9d7d

venomousfrog

runawaybishop wrote: »

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% at present) 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.

http://www.citizensinformation.ie/en/housing/renting_a_home/tax_relief_for_tenants.html#le9d7d

Should I ask her if she is paying the mortgage, or avoid bringing it up ? they setup a business in Oz, and as far as I know its going well for them.

ShiddyArze

The mortgage (if there is one) is none of your business.. Its tax you need to ask about

jay0109

venomousfrog wrote: »

Should I ask her if she is paying the mortgage, or avoid bringing it up ?

Do not ask her that.
a/ its none of your business
b/ she might not take it well and things could turn bad for you

venomousfrog

jay0109 wrote: »

Do not ask her that.
a/ its none of your business
b/ she might not take it well and things could turn bad for you

Ok, Im hoping she just wants to get some stuff from the attic like she asked. However seems like a long way to come to get something.

TheChizler

Just to emphasise and quote the entire relevant section, because this could be very serious:

[font=Arial, 'Trebuchet MS', sans-serif, Verdana]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.[/font]

[font=Arial, 'Trebuchet MS', sans-serif, Verdana]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% at present) 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.[/font]
[font=Arial, 'Trebuchet MS', sans-serif, Verdana]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.[/font]
[font=Arial, 'Trebuchet MS', sans-serif, Verdana]Accounting to Revenue for tax deducted from rent[/font]
[font=Arial, 'Trebuchet MS', sans-serif, Verdana]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.[/font]
[font=Arial, 'Trebuchet MS', sans-serif, Verdana]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.[/font]
[font=Arial, 'Trebuchet MS', sans-serif, Verdana]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.[/font]
[font=Arial, 'Trebuchet MS', sans-serif, Verdana]At the end of the year you must give your landlord a completed Certificate of Income Tax Deducted - Form R185 (pdf).[/font]

I'd start deducting 20% immediately and hope that the landlord has been paying her tax all along. Get onto Threshold/PRTB and find out what should be done about the tax you haven't been withholding for the last two years; i.e. should you start withholding 100% until the balance has been restored or the landlord confirms that she has been paying tax. I have no idea if that's a legitimate way to go about it so consult with someone who knows before you start deducting more that 20%.

Alternatively, and probably the better way, get onto the landlord, inform her about the tax problem, and make an arrangement to withhold an agreeable amount until the liability is gone.

Edit: This thread gives more info. It seems that Revenue are unlikely to pursue you for previous liability as you were unaware.

_Kaiser_

I'd do nothing until you have a chat with her OP - just withholding/deducting rent without doing this first will likely cause all sorts of other real issues for you.
Advise her that you read recently that you may have a tax liability if she lives abroad and that you need to work out a way that you're both covered with Revenue.

Be prepared though that if she hasn't declared the situation (likely IMO) this could turn sour for you very quickly.

Mrs OBumble

OP, she may already assume that you have been deducting and paying the tax as you were supposed to - and that's why your rent is below the market value.

I would take Kaiser's advice, and phrase the question about tax as he suggested.

Do not ask about the mortgage, you have no entitlement to know about that.

venomousfrog

Mrs OBumble wrote: »

OP, she may already assume that you have been deducting and paying the tax as you were supposed to - and that's why your rent is below the market value.

I would take Kaiser's advice, and phrase the question about tax as he suggested.

Do not ask about the mortgage, you have no entitlement to know about that.

Ok, thanks for the advice.

ShiddyArze

Isn't it fairly ridiculous that its the Tennant's responsibility to pay a landlords tax?

venomousfrog

To be honest I didn't know until you told me. I assumed she looked after it, afterall it is her house. But I agree its ridiculous, Im a little wiser now , thanks.

athtrasna

ShiddyArze wrote: »

Isn't it fairly ridiculous that its the Tennant's responsibility to pay a landlords tax?

It's the law regardless.

Difficult to prove the op know the LL was living abroad. My LL could easily be living abroad and I wouldn't know (I do know he isn't though but that's beside the point). Everything including moving in, paying deposit etc was done over the phone as is all repair requests etc and he never comes to the house.

ShiddyArze

athtrasna wrote:

It's the law regardless.

I'm not debating that! Suppose its the same as my employer paying my income tax

Sun in Capri

What about receipts for the rent, do you get these?

Mrs OBumble

Sun in Capri wrote: »

What about receipts for the rent, do you get these?

Why are receipts relevant? If the payment is done by standing order, there's a clear paper trail.

venomousfrog

Update - Landlord called in last night , got what she needed from the attic and had a cuppa of tea and never mentioned anything about rent increase, nice to finally meet her.... I didn't get to ask about the lease or anything else, she just said we were good tenants and keep the place very clean. She said she was happy to keep us on and then left .

stoplooklisten

Did you get the chance to sort the tax?

venomousfrog

stoplooklisten wrote: »

Did you get the chance to sort the tax?

No I didn't, Im going to look into this right away, I just didn't want to ask her too much as she just arrived from Oz and had to go visiting other family etc.

Michael D Not Higgins

venomousfrog wrote: »

No I didn't, Im going to look into this right away, I just didn't want to ask her too much as she just arrived from Oz and had to go visiting other family etc.

I estimate you owe ~2800 in back tax and it is you who owes it, since the tax law is written that way (crazy I know). Definitely one to make sure the landlady is aware, since she could be paying tax already and that would put you at ease.

Remember Revenue will chase you for the tax if it's not paid.

ShiddyArze

Michael D Not Higgins wrote:

Remember Revenue will chase you for the tax if it's not paid.

Why haven't Revenue chased him/her already? How would they know about such a thing unless informed

Michael D Not Higgins

ShiddyArze wrote: »

Why haven't Revenue chased him/her already? How would they know about such a thing unless informed

Yes Revenue can only chase what they know about. It's one of two situations, either the tax is already paid or Revenue don't know about it.

I don't know of all the ways Revenue use to catch tax dodgers but it's hardly inconceivable that they would find out eventually.

venomousfrog

ShiddyArze wrote: »

Why haven't Revenue chased him/her already? How would they know about such a thing unless informed

When we moved to the house in 2014, it had a prepay meter for electric and gas, we don't have a TV bill, we use free to air for TV. The only letters I get are from the bin collection. In fact, as we don't get any post im pretty sure revenue don't think I exist at the address. I didn't register to vote and all my car insurance etc goes to my family address in Dublin.

TheChizler

venomousfrog wrote: »

ShiddyArze wrote: »

Why haven't Revenue chased him/her already? How would they know about such a thing unless informed

When we moved to the house in 2014, it had a prepay meter for electric and gas, we don't have a TV bill, we use free to air for TV. The only letters I get are from the bin collection. In fact, as we don't get any post im pretty sure revenue don't think I exist at the address. I didn't register to vote and all my car insurance etc goes to my family address in Dublin.

None of which Revenue necessarily uses to get address info. Where does your tax correspondence get sent? How do you get your P60 at the start of the year? Does work know where you live? I doubt they'd be able to tell you're renting from those either, but one definite method is through the PRTB. Your landlord would have (or at least should have) registered you with the PRTB and as part of that process passed on your PPSN. This information can be and is shared with Revenue.

venomousfrog

TheChizler wrote: »

None of which Revenue necessarily uses to get address info. Where does your tax correspondence get sent? How do you get your P60 at the start of the year? Does work know where you live?

I changed jobs in February 2015 and have been here since. I got a p60 from the previous company back in January just gone.

DSN

Basically if you claim you didn't know of this obligation (or didnt know LL was abroad) you will not have to back pay if you give the landlords details & how much you've paid them & for how long etc & then the Landlord is assessed. I never heard of this until today & indeed it sounds crazy!
Am glad LL didn't put rent up - in my experience as a LL a good tenant especially when you living far away is worth a hell of a lot more than an extra couple hundred a month.

Residential lettings
In the case of residential lettings, tenants may not be aware of their
obligation to deduct tax. This can occur either because the tenants are
unaware that the landlord is resident abroad or because the tenants are
unaware of the obligation to deduct tax when making payment to such
a landlord.
The following material is either exempt from or not required to be published under the
Freedom of Information Act 2014.
[…]
In this scenario, the tenant should be asked to provide the following
details as regards the landlord:
 Name and address
 Details of the bank account into which rent is paid (name and
address of the bank and the account number into which the
payments are made)
 Details of the rents paid to the non-resident landlord for all years
for which the landlord was resident abroad.
An assessment can be entered on the landlord, at his or her foreign
address, and where necessary powers of attachment under section 1002
TCA 1997 can be used to enforce collection of the tax due.
The tenant should be advised to deduct tax from all future
payments to.

Michael D Not Higgins

Michael D Not Higgins wrote: »

Remember Revenue will chase you for the tax if it's not paid.

How can they prove the op knew the LL was abroad?

TheChizler wrote: »

Where does your tax correspondence get sent? How do you get your P60 at the start of the year? Does work know where you live? .

For example all my tax correspondence etc (along with bank accounts, phone bills) etc etc are all addressed to my home house with isn't even in the same county as where I work and rent. The address work has for me is also my home place. Now I also have one or two things addressed where I live, car registered there purely as I need it to get a permit and a water bill but its not hard to see how someone could have nothing tying them to an address, I also have no lease with my name linked to the address and never gave my PPSN nor was the tenancy regsitered. Before I went to get a permit and before Irish water I had nothing addressed to my rental address. Not saying this as a way to do anything underhand just making the point that some don't have much/anything in their name at a rental address.

Michael D Not Higgins

DSN wrote: »

Basically if you claim you didn't know of this obligation (or didnt know LL was abroad) you will not have to back pay if you give the landlords details & how much you've paid them & for how long etc & then the Landlord is assessed. I never heard of this until today & indeed it sounds crazy!
...

Good to know. I hadn't heard of any cases where Revenue had actually chased the tenant. I presume the issue might arise if Revenue couldn't chase the landlord for some reason.

They even say: "Failure to deduct tax may leave you liable for the tax that should have been deducted."

Annasopra

So the property isnt even registered with prtb? Ugh

_Kaiser_

Joeytheparrot wrote: »

So the property isnt even registered with prtb? Ugh

I'd say there's a lot of them that aren't unless it's let through a bigger agency.

The reality is that in Ireland we complain about things like problem tenants and landlords, but are far too fond of doing things "on the side" if possible, which is what leads to those issues.

It's not just restricted to the rental sector either... everything in this country runs along the same lines.

4ensic15

Michael D Not Higgins wrote: »

Good to know. I hadn't heard of any cases where Revenue had actually chased the tenant. I presume the issue might arise if Revenue couldn't chase the landlord for some reason.

They even say: "Failure to deduct tax may leave you liable for the tax that should have been deducted."

Read this.
https://www.ombudsman.gov.ie/en/Publications/Annual-Reports/2009-Annual-Report/AnnualReport2009/chapter6.html#s2

Icepick

4ensic15 wrote: »

Read this.
https://www.ombudsman.gov.ie/en/Publications/Annual-Reports/2009-Annual-Report/AnnualReport2009/chapter6.html#s2

and the usual some adults have the brain of a 12-year old excuse