NPPR charge was after all deductible from Income tax

GGTrek

Only good news for landlords that I have seen in the past few months. High Court judgment is final I believe:
http://www.courts.ie/Judgments.nsf/09859e7a3f34669680256ef3004a27de/c4a8cfe246ded89c802580a4004101d7?OpenDocument

Revenue extorted enough money from Landlords with the story that all these local taxes were not deductible, it is a real injustice to hundreds of thousands of lanldords that will not be able to claim it back due to statute of limitations. LPT is very similar to NPPR and I strongly believe that landlords can deduct it from income tax and only the very interested Revenue Commisioner does not envisage this. Of course the road to curb the hunger of the Irish Revenue is long and hard as the case linked above shows.

exaisle

Thanks for the post OP.

I wonder if the original appellant (and respondent in the High Court Case) is now entitle to receive refunds for all relevant years to 2009 regardless of the limitations imposed by the Taxes Acts,given that the matter was sub judice and that proceedings had been commenced in 2013?

If so, does this also apply to everybody else?

GGTrek

According to this accountant you can oly claim back income tax for 2013. 2009 to 2012 are gone:
https://mcgibney.ie/2017/01/16/finally-high-court-rules-nppr-is-tax-deductible/

Only the claimant himself can claim back every year since he started legal proceedings many years ago. It is a very limited loss for Revenue

4ensic15

GGTrek wrote: »

According to this accountant you can oly claim back income tax for 2013. 2009 to 2012 are gone:
https://mcgibney.ie/2017/01/16/finally-high-court-rules-nppr-is-tax-deductible/

Only the claimant himself can claim back every year since he started legal proceedings many years ago. It is a very limited loss for Revenue

People who didn't pay at all can deduct what they had to pay on sales of property after the cap came in.

pc7

If someone didn't pay and now owes say €3600 (think that was the penalty (extortionate) rate) and only pay now can they deduct it?
Thanks for posting this, such a sickener it wasn't known in November, I'm going to talk to my accountant about deducting property tax going forward.

3DataModem

Deducted it every year thankfully, on the advice of a tax advisor. Her argument was that it was a reasonable assumption and if eventually charged unlikely to attract I&P.

pc7

3DataModem wrote: »

Deducted it every year thankfully, on the advice of a tax advisor. Her argument was that it was a reasonable assumption and if eventually charged unlikely to attract I&P.

Who is your advisor can you pm, they seem on the ball

April 73

Has anyone attempted a similar case over the LPT does anyone know?

The_Conductor

April 73 wrote: »

Has anyone attempted a similar case over the LPT does anyone know?

That's what I was thinking........
If the NPPR was deductible- and LPT is deductible for any other business- then why not for the residential tenancy market?

murphaph

I deducted NPPR every year as it was clearly to me, a rate levied by the local authority. The bills came from the local authority. I lost my nerve with LPT though as it's levied by Revenue. I hope some other courageous soul challenges this one too. Still now, half thinking I'll start putting LPT in and hope for the best.

Marymidlands

Sold a rental property recently and had to fork out €7000 plus NPPR. (I know , I know) what can I claim back on income tax now?

pc7

Marymidlands wrote: »

Sold a rental property recently and had to fork out €7000 plus NPPR. (I know , I know) what can I claim back on income tax now?

It is absolute extortion making the penalty so high. A loan shark would be cheaper. I'm all for paying your share and not avoid taxes due but €7k on a few hundred euro is beyond wrong.

Marymidlands

pc7 wrote: »

Marymidlands wrote: »

Sold a rental property recently and had to fork out €7000 plus NPPR. (I know , I know) what can I claim back on income tax now?

It is absolute extortion making the penalty so high. A loan shark would be cheaper. I'm all for paying your share and not avoid taxes due but €7k on a few hundred euro is beyond wrong.

Tell me about it. But had to pay it to sell property and I needed to sell.

GGTrek

Lots of questions in this thread, my opinion which is not to be taken as legal advice:

- if we compare the NPPR and LPT acts (I checked the statute book) with the statements of the High Court judge we can see that Revenue does not have much standing anymore saying that LPT is not income tax deductible. Saying that Revenue collects LPT is just a fig leaf and a service that Revenue provides to Local authorities as any collection agent could provide, money collected from LPT is still completely destined to local authorities and the law makes this very clear.

- I have been discounting LPT from income tax since its very start, if Revenue and Irish government finally decide to be smart (instead of strong arming the Irish landlords as they have done in the past several years) they will drop any future and past claims of non deductability of LPT and absurd late payment fees and interest. Otherwise if they come looking for my money I shall follow the path of the guy in the first link I posted took against Revenue.

I am sick of the Irish government taking from me at every step (look at the latest legislative changes of the RTA) and giving back absolutely nothing. I strongly believe that it is time landlords start to challenge judicially all the cr*p that the Irish government gave them since 2009 (8 years of cr*ap is a very long time in my book), if I had enough money to put at stake (unfortunately I do not have a few hundred thousands of euros to burn on legal assistance), I would have already started the feasibility study of the costitutional challenge effort to the latest RTA changes which are, in my opinion, the maximum example of the Irish government strong arming again the small-medium landlords in Ireland.

The Government has strong armed even the Ipoa, look at their retraction: http://ipoa.ie/industry-information/
They are spineless.

The_Conductor

Marymidlands wrote: »

Sold a rental property recently and had to fork out €7000 plus NPPR. (I know , I know) what can I claim back on income tax now?

After the court case- I'd be writing a stiff letter to the Revenue Commissioners- suggesting they return the entire sum to you- plus interest- or face you in court. They have already lost one case- which established precedent- if they want to face another day in court- they risk loosing costs ontop of everything else. Simplest thing for them to do, would be put their hands up- issue you a refund cheque for the lot, and let bygones, be bygones. Can't see that they'd even try to defend what is now indefensible.

Marymidlands

The_Conductor wrote: »

Marymidlands wrote: »

Sold a rental property recently and had to fork out €7000 plus NPPR. (I know , I know) what can I claim back on income tax now?

After the court case- I'd be writing a stiff letter to the Revenue Commissioners- suggesting they return the entire sum to you- plus interest- or face you in court. They have already lost one case- which established precedent- if they want to face another day in court- they risk loosing costs ontop of everything else. Simplest thing for them to do, would be put their hands up- issue you a refund cheque for the lot, and let bygones, be bygones. Can't see that they'd even try to defend what is now indefensible.

Just wondering do you mean entire €7000 plus that I paid fingal county council or tax paid ?

The_Conductor

Marymidlands wrote: »

Just wondering do you mean entire €7000 plus that I paid fingal county council or tax paid ?

Mary- you have to pay tax- the same as any of us- I mean the 7k NPR plus interest- that is what you'd have a reasonable expectation of getting back- not the entirety of your tax that you paid- nice try though

pc7

@the-conductor what kind of money would cover such a study? Or challenge. Would you consider a gofundme page,I think lots of landlords would support the challenge. The problem is no one has the funds to do it alone.

Marymidlands

The_Conductor wrote: »

Marymidlands wrote: »

Just wondering do you mean entire €7000 plus that I paid fingal county council or tax paid ?

Mary- you have to pay tax- the same as any of us- I mean the 7k NPR plus interest- that is what you'd have a reasonable expectation of getting back- not the entirety of your tax that you paid- nice try though

No I meant could I have gotten €200 per year against tax . Why would I be entitled to entire 7000 back. Why would I be writing to tax office when I paid it to a council even if it is a tax.

GGTrek

pc7 wrote: »

@the-conductor what kind of money would cover such a study? Or challenge.  Would you consider a gofundme page,I think lots of landlords would support the challenge. The problem is no one has the funds to do it alone.

My suggestion is: look at the high court case. There will be a solicitor name of who was representing the defendant (i.e. the taxpayer), contact the solicitor and ask for the following:

1) how much it would cost in legal fees to take the case against Revenue at (a) the appeal commisioner first  http://www.taxappeals.ie/ and then (b) the almost inevitable appeal to High Court. This is the very expensive step, since the government (i.e. Revenue) on such an important matter as LPT deductability will bully it through to the High Court and will pay its legal expenses through taxpayers money to strong arm the same taxpayer!

2) If you can fund step (b) above though third party funding, there are some very old laws and some recent case law that prohibit third party funding even for cases that are of public interest. Unless all the landlords willing to fund can mount a class action against Revenue. I am not sure of the legal implications here and the solicitor of the case should know pretty well how the funding of the case can be legally structured. If class action or third party funding is legally possible the same could be done to mount a legal constitutional challenge against the latest changes to the RTA.

April 73

^ I'm going to go to bed dreaming that this might happen. I would love to see it.

What gets forgotten in all the talk of rotten greedy landlords raising rents is the extra costs & taxes imposed by government over the last number of years. NPPR, LPT, RTB, BER, PRSI, USC etc. All of which have played a part in raising the costs for LLs which in turn get passed to tenants.

The_Conductor

Marymidlands wrote: »

No I meant could I have gotten €200 per year against tax . Why would I be entitled to entire 7000 back. Why would I be writing to tax office when I paid it to a council even if it is a tax.

The case being discussed was someone who paid their NPR and deducted it against their tax- but who was penalised by Revenue. They challenged it- and subsequently it went to court- where they won. Having re-read your case- its different. This person was penalised by Revenue for having the tenacity to claim it as an allowable expense. This is what was wrong. In your case- I don't think you were penalised in a similar manner (correct me if I'm wrong)- you did not however claim it as an allowable cost- and would now be entitled to do so for the last 4 tax years (however, seeing as it was abolished- you may only have a claim on 1 year- which would possibly net as low as 100 Euro). Your case is not the same as the court case.

murphaph

Marymidlands wrote: »

No I meant could I have gotten €200 per year against tax . Why would I be entitled to entire 7000 back. Why would I be writing to tax office when I paid it to a council even if it is a tax.

Yeah obviously you can't claim the (outrageous) penalties in your tax return, but when did you pay that sum to the council? If it was in the last 4 years you could at least put through all the €200 amounts in your next tax return as you will not have paid them prior to 4 years ago.

pc7

Thanks ggtrek for your reply, very interesting. Never knew about funding issues etc. For a case. Reckon it may take one of the big boys to challenge this one.

Marymidlands

Yeah obviously you can't claim the (outrageous) penalties in your tax return, but when did you pay that sum to the council?

I paid it early on in the new year, about two weeks ago.

The_Conductor

Marymidlands wrote: »

Yeah obviously you can't claim the (outrageous) penalties in your tax return, but when did you pay that sum to the council?

I paid it early on in the new year, about two weeks ago.

That was LPT- not NPPR- its a different tax- same idea- but paid directly to the Revenue Commissioners. NPPR has been deemed tax deductible for landlords- there has been no such test case for LPT (thus far).

Marymidlands

The_Conductor wrote: »

Marymidlands wrote: »

Yeah obviously you can't claim the (outrageous) penalties in your tax return, but when did you pay that sum to the council?

I paid it early on in the new year, about two weeks ago.

That was LPT- not NPPR- its a different tax- same idea- but paid directly to the Revenue Commissioners. NPPR has been deemed tax deductible for landlords- there has been no such test case for LPT (thus far).

No I paid the NPPR of €7000 + in order to sell property that was I was in negative equity with.

Claw Hammer

Marymidlands wrote: »

No I paid the NPPR of €7000 + in order to sell property that was I was in negative equity with.

The €7000 is going to the Council so the same principle should apply. You have no rental profit in the current year to claim against though

ambf1974

Hi all, interesting reading. As it happens I also paid NPPR + Penalties,EUR4220, in total for the last two years, so within the 4 years where you can claim a tax refund. What are the chances that I can claim it back, or some of it? Worth a try this year? We are about to pay the final installment next month and haven't missed a payment because of the threat of it jumping to 7k!!

The_Conductor

ambf1974 wrote: »

Hi all, interesting reading. As it happens I also paid NPPR + Penalties,EUR4220, in total for the last two years, so within the 4 years where you can claim a tax refund. What are the chances that I can claim it back, or some of it? Worth a try this year? We are about to pay the final installment next month and haven't missed a payment because of the threat of it jumping to 7k!!

You have to pay the NPPR and the relevant penalties- it is however then an allowable cost against your gross rental income. You would submit a revised tax return for the relevant years- reducing your rental income by the amount of the NPPR.

Note- the NPPR itself has been determined to be an allowable cost- not any penalties for late/non-payment.

4ensic15

The_Conductor wrote: »

You have to pay the NPPR and the relevant penalties- it is however then an allowable cost against your gross rental income. You would submit a revised tax return for the relevant years- reducing your rental income by the amount of the NPPR.

Note- the NPPR itself has been determined to be an allowable cost- not any penalties for late/non-payment.

The NPPR goes up if not paid on time so it is not technically a penalty. The fare on the Dart is €100 abated if in possession of a valid ticket. people without tickets are asked to pay the full price of €100 which is not therefore a penalty.

The_Conductor

4ensic15 wrote: »

The NPPR goes up if not paid on time so it is not technically a penalty. The fare on the Dart is €100 abated if in possession of a valid ticket. people without tickets are asked to pay the full price of €100 which is not therefore a penalty.

Feel free to argue that to your hearts content with Revenue- and I wish you the best of good luck with it.

4ensic15

The_Conductor wrote: »

Feel free to argue that to your hearts content with Revenue- and I wish you the best of good luck with it.

The guy who won in the High Court argued. There is going to be an appeal.

GGTrek

4ensic15 wrote: »

The_Conductor wrote: »

Feel free to argue that to your hearts content with Revenue- and I wish you the best of good luck with it.

The guy who won in the High Court argued. There is going to be an appeal.

Unfortunately it is true:
https://www.rte.ie/news/business/2017/0222/854544-second-homes-charge-landlords/
The suggestion (in the article) is for each landlord that did not discount NPPR from Income Tax chargeable income is to apply now for a refund to revenue so that they do not loose the refund <mod snip> "to wind down the clock so as to deny property owners the tax refund they are now legitimately due arising from the High Court decision"