Renter tax credit - unregistered tenancy

Jmc25

I'm currently renting an apartment which I know is not registered with the RTB. I also know that the LL does not pay tax on his rental income. I know this because he told me out straight at the start in case I wanted to "claim anything". I suspect he was referring to HAP.

So far, so foolish on the LL's part.

Anyway, I do actually have a signed lease which appears to be a template style one which you'd find online, so there can be no argument at all that a tenancy exists (he can't claim that he lives here and I'm a licensee for example).

The rent was market rate when I started the lease early last year and now it's less than market rate, as happens with basically all tenancies now due to RPZ rules. In fairness, he's never mentioned applying the two per cent he would be entitled to.

Generally he's been fairly sound to deal with, although I've actually only had to contact him once or twice about fairly minor stuff and I've never had any issues with paying rent on time etc.

Anyway, obviously I want my 500 rental tax credit, and from what I read the tenancy would need to be registered for that to happen. I could just contact the RTB or even just claim the credit and see what revenue say but it would probably be sounder to give the LL a ring and try and negotiate a rent reduction of 500 over the course of the year, or all at once.

He probably won't be happy with this but he's really done a bad job at covering his tax avoidance here so I guess that's his tough luck.

I feel bad having to ring him and basically imply that I'm going to report him to Revenue if he doesn't reduce my rent, but I also don't see why I should miss out on 500 euro just because he doesn't want to pay tax.

I'm not worried about being kicked out as I'm looking at buying early next year anyway.

Thought it was an interesting situation anyway, anyone see any pitfalls to my strategy?

https://www.boards.ie/discussion/2058266781/renter-tax-credit-unregistered-tenancy

Are you paying him in cash?

Silly on his part with all the rights a tenant has, to expect them not to apply because he isn’t declaring his income.

CramCycle

Your rent hasn't gone up? If he had increased it would it be equivalent to the 500?

The old credit you just put it in on your P21 claim, not sure if it's as simple now.

As for the pitfalls, 500 is nice but your leaving next year and he sounds like an oK landlord. Quite possible he wouldn't reach the tax threshold so silly of him but is it worth making it awkward for the last year?

DFB-D

Which has the higher value?

500 for each tenant vs 2% of the rent, etc.

DubCount

This was announced in the budget, but all the terms and conditions wont be clear until the Finance Bill is published. The requirement for RTB registration may be included, but I reckon the Tax credit will apply to people who are renting a room in the Landlords home (Licensee) and they have no requirement to register with the RTB. I think its too early to know yet.

blackbox

This is an excellent policy that leads to more compliance.

The government should introduce tax relief for everyone for all expenditure that involves the labour of someone else.

This would help to eliminate people/businesses from offering "cash" prices and reduce the black economy.

https://www.boards.ie/discussion/comment/119724491#Comment_119724491

And no doubt increase rents.

dmakc

You are already "below the market rate" in rent, I find this to be the main perk of having an unregistered landlord. I would be an honourable tenant and see out there remainder as is.

You sound like finances are well in order given that you're going buying within the next year so bringing friction on someone for the sake of 500e says more about you than it does about him.

blackbox

https://www.boards.ie/discussion/comment/119724509#Comment_119724509

It might increase the rent for a few, but at least it would create a level playing field for landlords and tenants that are compliant. A higher level of compliance should benefit tenants.

Jmc25

Interesting points about the 500 euro vs a 2 per cent increase. I hadn't thought of that. I've just worked out that the 500 would be slightly more and obviously I'd also be entitled to a proportion of the 500 for next year for the months I live there.

So I reckon we're talking about 300ish hundred euro over all. Agree it's debatable whether I should even bother for that amount of money.

A few posts have mentioned the below market rate rent as a reason for me not to rock the boat here. Just to clarify, it's only below market because since I took out the lease new asking rents have increased by about 10 per cent vs 2 per cent allowable under RPZs (the LL in fairness has not even applied the 2 per cent). Any tenancy which commenced when mine did would similarly be below market rate for that reason, so I don't have any kind of special deal here.

I'm fascinated though by the posts which sympathise with the LL. While he seems to be a decent guy (in the limited interactions I've had with him), he's evading tax and not being very clever about it. Surely no one has sympathy for tax evaders facing (very minor in this case) consequences of their own actions?

https://www.boards.ie/discussion/comment/119725364#Comment_119725364

True, but the few might not be too happy to pay more.

https://www.boards.ie/discussion/comment/119725397#Comment_119725397

Are you paying him in cash? I asked earlier.

...Ghost...

https://www.boards.ie/discussion/comment/119725397#Comment_119725397

You've been facilitating his tax EVASION (not tax avoidance) , so you're no different except for the fact that a carrot of 300e is sufficient for you to claim the high horse because 'ah well I'm leaving next year anyway.

dennyk

If you are leaving next year anyway, you're probably better off trying for the credit. One of the purposes of the rental credit scheme is to collect data on tax-evading landlords, so it's very likely there will be some process in place to claim the credit even if your landlord isn't registered, especially since they'll be allowing licensees (whose license arrangements aren't registered at all anyway) to claim it. The whole system won't be in place until early next year anyway, and it would take at least 90 days for any rent increase to go through (and odds are your cowboy landlord hasn't bothered to research the regulations and will fail to issue a rent review notice correctly, thus delaying it even further), so you wouldn't really have to worry about your landlord retaliating by raising your rent (or at worst only have to pay a bit more for a couple months).

On the other hand, if you try to extort a €500 rent reduction from your landlord now, he might retaliate in any number of ways, ranging from the perfectly legal (such as a rent review and increase of 2.x% effective in 90 days, or a termination notice because he's decided that he'd rather sell the place than take a 50% haircut on his rental income) to the "illegal but will still cause you a massive amount of hassle" (such as having a few hard lads stop by to gently encourage you to take a walk and get some fresh air, and once you get out of the A&E you'll find the locks changed and all your stuff hauled away to be dumped in a skip or listed on Donedeal).

Jmc25

https://www.boards.ie/discussion/comment/119725433#Comment_119725433

No, even more foolishly on his part, he asked me to pay into his bank account.

Jmc25

https://www.boards.ie/discussion/comment/119725552#Comment_119725552

I wouldn't have thought I'm facilitating anything. Certainly not legally speaking anyway.

Are you saying I should have reported him to Revenue up front when he told me about the fact that he wasn't paying tax?

Jmc25

https://www.boards.ie/discussion/comment/119726037#Comment_119726037

Yes very fair points here, perhaps best not to rock the boat by offering an off the books solution, and to simply apply for the credit and leave him to deal with the consequences.

And, as mentioned already, the difference between the credit and a 2 per cent increase which I'd likely be slapped with for asking the question would be small.

https://www.boards.ie/discussion/comment/119726164#Comment_119726164

If you are paying into a bank a/c and he told you he didn’t want you to apply for benefits because he wasn’t paying tax, I suspect he was in effect telling you he wouldn’t accept to if you were a HAP recipient. It might be a misguided way of getting around discrimination legislation, but seems to be affective.

Eircom_Sucks

https://www.boards.ie/discussion/2058266781/renter-tax-credit-unregistered-tenancy

and people complain about landlords

Eircom_Sucks

https://www.boards.ie/discussion/comment/119725419#Comment_119725419

what if that cnut of a landlord is giving is giving cheap rent , not asking for increases and leave the tenant alone ?

why is he a cnut when this country is bending everybody over and screwing them left right and centre

why pay tax when he is already paying enough interest on the mortgage

and don't give me the " but its the law " yes it may be so , but who in the government is abiding by the law ? everyman for himself

and if this tenant is getting cheap rent and being left alone then he is worse than the landlord in my eyes

https://www.boards.ie/discussion/comment/119725419#Comment_119725419

At the very least, the op is facilitating tax evasion, and has done from the start as he/she knows it. But that is not to say blame should lie with the op as he/she has been paying the rent into a bank account, as is the conventional way of doing so.

I would be amazed if this LL wasn’t paying tax, the rent is in his bank account, even the most sheltered LL knows that tenants have extensive rights, and you have to be fair stupid to voluntarily tell a tenant that you are going to evade tax.

My guess is the LL doesn’t want HAP tenants, and gave the op an excuse, a rather stupid one, as to why he/she shouldn’t apply for it.

Starfire20

https://www.boards.ie/discussion/comment/119726376#Comment_119726376

the LL isnt paying any interest on the mortgage, the tenant is via the rent.

The tenant pays the mortgage and the LL creams some further profit off the top for himself.

why should this LL be tax exempt?

ddarcy

not sure what the new bill will bring, but typically you have 4 years to claim the credit. So you could be in your new house and then claim it.

Jmc25

https://www.boards.ie/discussion/comment/119726314#Comment_119726314

Ah, yes good point and that could well explain why he was that open with me. On the off chance I ever reported it there'd be nothing to report, and he's avoided taking a HAP tenant.

The tenancy definitely is not registered though but that could be unrelated.

...Ghost...

https://www.boards.ie/discussion/comment/119726192#Comment_119726192

You said the LL doesn't pay tax on the rental income and there is no rtb registration. If these statements are true, then you are by default facilitating his tax evasion as you are not concerned about the lack of registration. Only now it interests you because of the tax credit for tenants.

Jmc25

https://www.boards.ie/discussion/comment/119728308#Comment_119728308

Interesting view.

I definitely don't feel any personal responsibility for my LL evading tax or failing to register the tenancy with the RTB and I doubt many in my situation would.

Jmc25

https://www.boards.ie/discussion/comment/119726767#Comment_119726767

This certainly seems like the smartest suggestion of the bunch alright, assuming the four year window for claiming applies.

...Ghost...

https://www.boards.ie/discussion/comment/119728445#Comment_119728445

And people who pay drug dealers for their habit don't feel any way responsible for the crime and loss of life caused by the trade. I'm alright Jack.

You don't know if your LL is actually evading tax. Claim your credit and stop trying to justify it.

Donald Trump

https://www.boards.ie/discussion/comment/119726767#Comment_119726767

I reckon there will be a lot of tenants who negotiate equivalent reductions in rent with their tax evading LLs ...... only for the tenant to submit for the 4 years back credits in 4 years time if that is the case.....

Donald Trump

https://www.boards.ie/discussion/comment/119726037#Comment_119726037

Well the OP could happily let him fire away and do all those things you suggest, and use any subsequent court award towards his own property.

The landlord is by definition a property owner, and hence would have assets that could be recovered as compensation were he to go down that road

https://www.boards.ie/discussion/comment/119728477#Comment_119728477

We are not talking about drugs here, the op is not doing anything illegal and has no responsibility nor obligation relating to the LLs tax compliance. The op is paying rent into a bank account, what more do you think he/she should do?

SteelyDanJalapeno

The 500 quid would be handy for Xmas op

Bass Reeves

https://www.boards.ie/discussion/comment/119726796#Comment_119726796

I suspect he dose not want a HAP tenant or to register with the RTB. Silly of him but he is probably tax compliant.

Just on a side note I think HAP, LA or any rent supported tenant's cannot claim the tax credit

Caranica

https://www.boards.ie/discussion/comment/119728872#Comment_119728872

It's a tax credit, not a cash payment. Will be spread over the year 🙄

Bass Reeves

https://www.boards.ie/discussion/comment/119728892#Comment_119728892

The one for this year will be paid in a virtual lump sum.

DataDude

https://www.boards.ie/discussion/comment/119725397#Comment_119725397

If it’s like other income tax credits, you’ll probably have a couple of years to claim back the credit. So you could just wait until you’re moving out then claim the credit. Save yourself the increase, save any friction.

If landlord is breaking the law, that’s his problem. Wouldn’t cost me a passing thought.

Edit - apologies see this was suggested already. Don’t know how to delete

DataDude

https://www.boards.ie/discussion/comment/119726376#Comment_119726376

Why pay income tax when he is paying interest on a loan he willingly agreed to with a completely unrelated third party.

Thats some of the most impressive mental gymnastics I’ve ever read on boards. Congrats.

batman75

By giving the OP 'cheaper rent' the LL is well ahead IF he is not paying tax. Is the assumption that if you don't register as a LL you must be tax evading?

Bass Reeves

https://www.boards.ie/discussion/comment/119724491#Comment_119724491

In theory it sounds great, however it's a bit even a zero sum game for the government. It would mean giving tax relief to people already doing things legally therefore there is a negative tax return to the government.

These reliefs are always rebated at the lower tax rate which may be less than the vat rate on professional fees.

Mostly what would happen is this action would drive inflation and would encourage some self employed sole traders to go and get jobs rather than run a micro business.

At certain levels it would make little or no difference as there would still be the ability to ignore the tax as at present. Of you own a corporate entity it nearly possible to put a lot of activities through the company whether it painting the house or buying a car. The weekly shopping is just about the only activity that is not tax deductible in such a senario. Not that individual's put everything through anyway

So really you are only trying to get the better off PAYE workers to stop paying cash for jobs, whether it's servicing the car or painting the house.

This idea that there is tons of cash floating around the system is deeply flawed but it often what ricks you boat.

It seems so simple but it much more complicated than that.

It like the people who scream that USC should be abolished without know the in's and outs of it it and the way it effects sole traders and the self employed

dontmindme

https://www.boards.ie/discussion/comment/119728929#Comment_119728929

If landlord is breaking the law, that’s his problem. Wouldn’t cost me a passing thought.

If the landlord is not paying tax, he's literally stealing out of your pocket, but you don't care?

https://www.boards.ie/discussion/comment/119729500#Comment_119729500

No he isn’t.

DataDude

https://www.boards.ie/discussion/comment/119729500#Comment_119729500

I meant it more along the lines of, I wouldn’t care at all if he got in trouble when the OP registers tenancy after he leaves the rental. I’d see it as a bonus.

So I agree with your sentiment but probably don’t feel it as strongly as you. I wouldn’t be going out of my way to get him in troubles

Yurt2

https://www.boards.ie/discussion/comment/119729517#Comment_119729517

If he's not registered the tenancy he is already breaking the law.

And while not every non RTB compliment landlord is on a tax-dodge, every tax-dodging landlord is not complaint with the RTB.

Some of the attitudes about tax evasion here belong in late 90s Greece or a Latin American country.

https://www.boards.ie/discussion/comment/119731745#Comment_119731745

Careful now on that high horse, it’s a long way down.

To claim that every LL who is not RTB registered, or not tax compliment is “literally stealing out of your pocket” is absurd.

Yurt2

https://www.boards.ie/discussion/comment/119731762#Comment_119731762

Re-read my post, and pay your taxes. This isn't Afghanistan.

https://www.boards.ie/discussion/comment/119731783#Comment_119731783

I did, I never said it wasn’t illegal, the post of mine you quoted related to stealing from the posters pocket, which is absurd. I pay my taxes, a lot of tax, but a LL who doesn’t pay taxes isn’t “literally stealing” from my pocket. But you are correct geographically and metaphorically, Ireland isn’t Afghanistan, Greece or Latin America.

combat14

think LL rtb number is required to claim tax back .. many renters wont want to ask LL for genuine fear of rocking rent and actual place to live boat.......

Yurt2

https://www.boards.ie/discussion/comment/119731818#Comment_119731818

I have zero sympathy for anyone on a tax-dodge for years on end. Particularly in something so socially and politically sensitive as housing.

They are stealing. Next time you look at your payslip, remember there's someone out there choosing how much tax they pay.

Unless you're a petro-state like Qatar, the difference between places like Ireland and third-world sh*tboxes is people playing ball on tax.

That's a hard rule of life, and there are still many in this country who apparently need a Revenue audit to teach them that lesson.

triddles

https://www.boards.ie/discussion/comment/119726376#Comment_119726376

This post is beyond pathetic.

triddles

https://www.boards.ie/discussion/comment/119728950#Comment_119728950

Insanity. Couldnt believe the post.

Board.surf

The poor landlord has to pay a mortgage? Pfft! Why do most people not realise that there are lots of tax deductions for landlords against tax payable on rental income. This includes for mortgage interest paid, furniture bought doyt the property etc.

Your landlord is likely tax compliant or a complete numpty!