Proving rent payments to bank for mortgage application

Cork2015!

Hi All,

Hoping someone may be able to advise me here (hoping this is in the right place apologies if it is not)

We are currently renting and for the last 6 years have ALWAYS paid our rent through the bank... for the specific reason that when we apply for a mortgage it is clear to the bank that we have been paying rent etc.

Currently have to move, dont have full deposit saved yet, so plan to rent for another 1-3 years. Finding it VERY difficult to find new rental property

New one has been advertised, perfect location, perfect house exactly what we need and rent is affordable

HOWEVER - Landlord wants us to pay x amount of the rent in cash (illegal I know, but its the only way they can offer us a cheaper rent which we absolutely need).

So my question for you all is this - If I set up a separate account and transfer the full amount of my rent every month with a description of "RENT" and then pay some in cash to my landlord - Will the bank count this as proof of repayment/rent spent? because the transfer will be into another account owned by me?

Or does the bank only count when the rent is transferred into somebody elses account?

I hope ive made sense here, a bit long winded i know

CiboC

There is nothing illegal about the landlord asking to be paid cash, what would be illegal is if they do not declare it as income to revenue, but that is not really your concern.

You should have a rent book if you are paying them cash, you could tell the LL that you are ok with paying part of the rent in cash as long as you get a receipt from him at the time each cash payment is made - this can easily be justified as being to avoid any confusion or doubt later on regarding what was paid by you to them. You don't have to mention that you want it to prove rent to a financial institution later.

dudara

Another way that you might be rely on is to withdraw the cash amount exactly from the ATM at the same time every month.

best way though is to get the landlord to agree to signing a rent book. There's nothing wrong with cash in of itself, it's just harder to track and verify.

If the new landlord is under-declaring, that's their concern.

witchgirl26

Yep not illegal to pay the rent in cash but ask the landlord to provide a rent book or receipt for each payment given that shows date and amount at least on it.

Toulouse

We’ve just bought a house and we were paying cash in our last rental. I had been worried about the bank but it wasn’t an issue because we were each paying half into our joint account, labelling it rent and then deducting the same amount at the same time every month from the joint account.

tvjunki

Nothing wrong in paying your rent in cash. Landlord could have had problems with previous bank transfer payments. This way he is guaranteed to get rent as s/he has to meet you at the property and they can inspect at the same time.

Vetch

I was paying rent in cash when I applied for a mortgage. The mortgage adviser asked how I was paying rent but just wrote down that it was in paid in cash, and that was the end of it.

4ensic15

Cork2015! wrote: »

Hi All,



HOWEVER - Landlord wants us to pay x amount of the rent in cash (illegal I know, but its the only way they can offer us a cheaper rent which we absolutely need).

What you are saying is that you are going to conspire with the landlord to defraud the Revenue?
If the landlord wants cash you should pay all of the rent in cash.

Bargain_Hound

We paid cash and landlord signed a rent book every month. A copy of this was submitted with our mortgage application and we were approved with no questions.

CiboC

4ensic15 wrote: »

What you are saying is that you are going to conspire with the landlord to defraud the Revenue?
If the landlord wants cash you should pay all of the rent in cash.

That's not what they are saying at all...!

They are saying the LL has asked to be paid part cash. That's it.

They are perfectly entitled to ask this, there is nothing illegal about it, the tenant would be doing nothing wrong with going along with it.

If the LL does not declare the full amount as income that would be illegal, but the tenant is completely out of the picture at this point, has nothing to do with it and is not complicit in anything.....

Lux23

The part thing is odd though. Sounds like he is only declaring part of the income.

Claw Hammer

CiboC wrote: »

That's not what they are saying at all...!

They are saying the LL has asked to be paid part cash. That's it.

They are perfectly entitled to ask this, there is nothing illegal about it, the tenant would be doing nothing wrong with going along with it.

If the LL does not declare the full amount as income that would be illegal, but the tenant is completely out of the picture at this point, has nothing to do with it and is not complicit in anything.....

The tenant is saying "its the only way they can offer us a cheaper rent which we absolutely need". The tenant is doing it so the landlord can commit fraud. No ifs or buts about it.

Cork2015!

No idea why they want part in cash and like another poster said if they are under declaring that is their issue really. We were just told that thats the way they like to do it, maybe it has something to do with the account that their mortgage is coming out of? (as they still have mortgage on the house they are renting)

I'm just so weary in case we are in this property for a year or two and then it turns into an issue when applying for mortgage.

The handiest thing for me to do would be set up another account (post office etc) and transfer the entire amount in there every month with the description RENT and then withdraw from that account and pay all of the rent in cash.

They only asked for approx 300 per month in cash, so im guessing if we give it all in cash that wont be an issue for them (i hope)

Claw Hammer

Cork2015! wrote: »

No idea why they want part in cash

Who do you expect to believe that?

Edgware

Lux23 wrote: »

The part thing is odd though. Sounds like he is only declaring part of the income.

Thats the idea. If Revenue see regular payment of rent into the account and then tax declared they have more to be doing than sending out investigators. Even if they did there is no proof of cash payments. If the property is registered with PRTB and income declared in accordance with that register than there will be no more about it. Revenue have bigger fish to fry.

CiboC

Claw Hammer wrote: »

Who do you expect to believe that?

They don't need anyone to believe it!

I don't get why people believe this is the tenant's problem. If the LL is under declaring income it is between the LL and revenue, the tenant has nothing to do with it.

If the LL is under declaring Revenue would be able to pick up on it very easily by having a tax relief on rent paid as was the case a few years ago, but this was gotten rid of.

It would be so easy for Revenue to ask tenants for a LL's PPS number, and the rent paid to claim an element of relief, they would have all they need to catch this, but they don't.

NOT THE TENANT'S PROBLEM...!!

Claw Hammer

CiboC wrote: »

They don't need anyone to believe it!

I don't get why people believe this is the tenant's problem. If the LL is under declaring income it is between the LL and revenue, the tenant has nothing to do with it.

If the LL is under declaring Revenue would be able to pick up on it very easily by having a tax relief on rent paid as was the case a few years ago, but this was gotten rid of.

It would be so easy for Revenue to ask tenants for a LL's PPS number, and the rent paid to claim an element of relief, they would have all they need to catch this, but they don't.

NOT THE TENANT'S PROBLEM...!!

Conspiracy to defraud the revenue is the problem of everybody involved, if they get caught. This saying the revenue won't find out is nonsense. They have numerous ways of detecting people committing fraud.

CiboC

The point you are missing is that agreeing to this does not in any way constitute conspiracy to defraud Revenue......!

The tenant has no knowledge of the LL's tax affairs, and it is none of their concern....

The LL has not told them 'pay me part in cash as I intend to pocket that and say nothing to revenue about it...'

L1011

CiboC wrote: »

The LL has not told them 'pay me part in cash as I intend to pocket that and say nothing to revenue about it...'

Going on the line in the OP about it being 'the only way' the LL can offer the rental to them, it is quite possible they did. People can be surprisingly open about committing fraud in this country if its against certain targets.

JDD

Claw Hammer wrote: »

Who do you expect to believe that?

I don't think he should care who believes it, since it's not his concern. Maybe the bank rent goes to his ma, and the cash part to him? Maybe he's using the cash to build a rocket to the moon? It's not the renter's concern.

Claw Hammer

JDD wrote: »

I don't think he should care who believes it, since it's not his concern. Maybe the bank rent goes to his ma, and the cash part to him? Maybe he's using the cash to build a rocket to the moon? It's not the renter's concern.

The OP has said that paying part in cash is the only way can be given to them at a reasonable price. It is quite clear they are joining in a conspiracy to commit fraud on the Revenue to get a lower rent for themselves.

JDD

To commit conspiracy you have to prove intention, which means proving actual knowledge that the LL is defrauding the Revenue. There is absolutely no evidence of that here. Therefore no conspiracy, and there's no way the Revenue could every prove anything. Stop trying to scaremonger the poor tenant.

You've got a point, that we all turn a blind eye to under-the-counter dealings which perhaps in other countries wouldn't be so easily tolerated by the general public. But have a bit of sympathy for the tenant, he's having trouble finding any accommodation - I think that trumps any latent concerns he should have over someone else tax returns.

Claw Hammer

JDD wrote: »

To commit conspiracy you have to prove intention, which means proving actual knowledge that the LL is defrauding the Revenue. There is absolutely no evidence of that here. Therefore no conspiracy, and there's no way the Revenue could every prove anything. Stop trying to scaremonger the poor tenant.

You've got a point, that we all turn a blind eye to under-the-counter dealings which perhaps in other countries wouldn't be so easily tolerated by the general public. But have a bit of sympathy for the tenant, he's having trouble finding any accommodation - I think that trumps any latent concerns he should have over someone else tax returns.

There is plenty of evidence why are they saying that the only reason they can get the rent at a lower price is by paying part in cash? Trying to say that there is no way something can't be proven doesn't mean that it's not happening. The Revenue call to the tenant and ask why the paying part in cash and ask what explanation the landlord gave, what are they to say? Tell lies for the truth? If the Allies there will be dealing old for themselves. If the tell the truth they would be admitting conspiracy.

Cork2015!

Thanks for your replies everyone. Regarding us defrauding the tax man.... this is the way the actual conversation went

LL: So house is yours if you want to take it
ME: OK Great, is there any bit of wiggle room on the price
LL: I can drop the rent by €200 max as you seem like an ideal tenant
ME: Great thats fantastic
LL: No problem, this is what we were getting off previous tenant also. The way we like to do it is for tenant to pay x amount by bank and x amount in cash. This is what we have always done as it suits our financial situation for mortgage etc.

So not sure where we defrauded anyone here?!?!? or maybe im too close to the situation and have been blinded?

JDD

I think you're grand Cork2015!, don't be minding the conspiracy theorists. I was only engaging in the argument because I was bored.