Question about the Vacant Home Tax?

tinytobe

Just wondering about the Vacant Home tax:

https://www.revenue.ie/en/property/vacant-homes-tax/what-to-do/index.aspx

When would a property be seen as "in use"?

Suppose, I am not a property investor, and it is about my only and main property I own in Ireland, but I am away overseas for professional reasons. The apartment would still contain my belongings, furniture, clothes etc.

Would I still be subject to that tax?

Or is this tax realy only about empty and really vacant homes?

DubCount

"In use as a dwelling" would suggest to me that it needs to have someone living in the property. I dont think having belongings in it would be enough.

Check it out with your accountant or contact Revenue directly for their opinion.

tinytobe

https://www.boards.ie/discussion/comment/121084489#Comment_121084489

It would target the wrong audience if this was the case.

I would understand if it's about an investor who isn't renting out and owns many properties.

However one property and one unexpected job overseas with intention to return to Ireland would imply that this vacant tax would kick in?

Also what would happen, if one has no income at all for say, one year, living off savings? It does happen.

That's really sad.

DownByTheGarden

All sorts or reasons a property may not be vacant.

When my apartment was empty before the sale went through, myself and my mates all had keys and could just crash in it on random days if it was too hard to get a taxi home.

I actually worked in it the odd day when it was too noisy with visitors at home. Sometimes I just went to watch a match with a few cans with some friends and then down to the local. If it got too late plenty of air mattresses and blankets in there for us all to sleep off the beer.

Kind of miss having it available now.

Oh, and at the time i let friends stay in it for weekends in Dublin too if they were up for a match or a concert. Plus another couple of friends from the UK stayed in for 2 weeks for their holidays. Im owed many pints that I still have to collect on :) The couple from the UK have told me I can have their apartment in Malaga whenever i want if they arent in it at the time too. I think i'll be taking them up on that at some point.

tinytobe

I'd suggest "in use" or "not in use" should be clearer.

Suppose one thing: Couple both living in an apartment, husband is the only provider for income, gets sent overseas, for one year, but with visits home. Wife has no income but staying, thus not doing a tax declaration. In this case, I don't think the tax should apply.

Same as the sole owner, single not married, being overseas for job reasons, not declaring taxes in Ireland, but still keeping his contents, clothes and belongings there.

I am guessing it'll be similar if one is in for long term hospital treatment.

Otherwise this vacant homes tax will target the wrong audience.

DownByTheGarden

The irony though is that mine would never have been vacant if only they hadnt made its so risky to rent it. In fat id probably still be renting it now instead of having sold it.

Im sure the vacant homes tax will come out and makes things even more difficult for people and then they will just keep changing the definition, each time making the whole situation worse for everyone. Why change the habit they have been in.

Is it a self declaration? If you are living in the country how would revenue verify that you used the property for less than 30 days of the year?

Allinall

https://www.boards.ie/discussion/comment/121085797#Comment_121085797

You have to verify that you were living in it for more than 30 days ( or someone else).

There is a suggested list of documentation you must keep for 6 years in case they check up.

L1011

I can see this bringing in four fifths of feck all unless they clarify "in use" to mean something more than "someone slept there that night".

Go to a holiday house every BH weekend and you're at 30 days already so the holiday homes all over the coastal/Shannon/lakes counties won't fall in the net. Not that triple 90 quid (under 200k value like most would be) is going to break anyone who can afford to keep a holiday house either.

I've done two WFH stints this year as well as longer periods at Easter etc so I'm over 30 for the year already with the October BH and Christmas yet to come.

tinytobe

https://www.boards.ie/discussion/comment/121085817#Comment_121085817

It would make sense what you're saying.

However I would never ever see any kind of property taxation under the motto, "if you can afford a 2nd property you can afford the tax, or whatever tax increases they throw at you".

The upkeep of a property or house isn't cheap either.

L1011

https://www.boards.ie/discussion/comment/121086335#Comment_121086335

If you can't afford it, sell it. Bit harder to accept when its one small holiday house than if you're an investor seeing house number 65 in the portfolio stop making money for you but the principle is still the same.

I've got the stack of receipts to know its not cheap, but I know that I can sell the place and stop paying them.

If you aren't using it enough to cause you to get the triple tax you probably don't need it; and if you can't afford the 180 quid that it would be for most people you won't be able to afford basic maintenance either.

Atlantic Dawn

In Italy they have a similar tax, way around it there is to throw the toilet out, that way house is deemed uninhabitable and not useable.

tinytobe

https://www.boards.ie/discussion/comment/121086348#Comment_121086348

Understood.

However it's that last statement that you wrote that I would see differently.

Interestingly it's a self assessment. You just state you've been there longer than required and the tax man would have to prove otherwise.

Theoretically you might even get away with it, even if you own 11 properties and stay in each and every one of them more than 30 days in any year.

However in this case, I don't think the tax man will be soft in you.

Del2005

https://www.boards.ie/discussion/comment/121085797#Comment_121085797

Electricity and gas usage. You have to provide the proof that you've been using it so you'd need to show the eclectic/gas consumption is consistent with a property being used for more than 30 days a year vs an empty property.

DownByTheGarden

https://www.boards.ie/discussion/comment/121091665#Comment_121091665

I dont think thats really proof at all. And I think unless revenue didnt believe that somehow you are occupying it for 30 days a year, they woudlnt be asking for bills anyway. Its the easiest think in the world to occupy a property for 30 days a year, or close enough that you could pretend its 30 days even if it wasnt unless its uninhabitable.

Even if they did ask for bills, which they wont, people would use zero gas between April and October so if the 30 days were in that time, no gas or oil need be used. You could easily leave on a dehumidifier or charge your car a couple of times to use electricity if you needed to. It keeps the damp out too.

Go for a weekend in the winter and heating it with electric rads while you are there would use the same as a months worth of electricity in the summer.

300kwh over the whole year would be more than the average person would use in a 30 day period. I know people who use far less even.

Peregrinus

https://www.boards.ie/discussion/comment/121085817#Comment_121085817

I don't think the point of the tax is to bring in much revenue; it's to encourage people to see that their houses are used rather than left vacant. So "it doesn't bring in a lot of revenue" doesn't necessarily mean that the tax has failed.

https://www.boards.ie/discussion/comment/121086600#Comment_121086600

It is a self-assessment tax, but the Revenue do have power to demand that you produce records to back up your assessment that you don't owe the tax.

But I think they have to be reasonable about what records to expect. If your claim is that you were letting it out on Air BnB, obviously there'll be scads of record that they can reasonably demand to see. But if your claim is that you yourself spent a long weekend there every month (total, 36 nights) there's not going to be a huge amount of documentation to back that up. Still, they will expect the records that would ordinary be generated by the claimed use - utility bills and so on. If necessary they'll look for bills month by month.

https://www.boards.ie/discussion/comment/121084891#Comment_121084891

It has to be "in use as a dwelling". According to Revenue guidance, that means someone must sleep there at night, and use it for ordinary living activities during the day — eating, relaxing, etc. It doesn't matter whether the someone is the taxpayer or anyone else.

Simply using the place to store your furniture and belongings while e.g. you are working overseas is not using it "as a dwelling". If you're in that situation you could consider e.g. inviting a friend or family member to stay there at least part-time, and act as caretaker.

(You'd probably want to do this anyway, for a variety of reasons. For one thing, your contents insurance will likely lapse if the property is unoccupied. Your property insurance may too, unless you tell your insurers about the situation, in which case they may decline cover or charge an extra premium. Plus, unoccupied properties deteriorate quite rapidly.)

Del2005

https://www.boards.ie/discussion/comment/121095458#Comment_121095458

If your electricity bill for 4 months is say 1kWh per bill and for another 2 month it's 20kWh that proves that the property was being used, gas usage would be added evidence but might not get used much during summer. What other proof can people provide that they where using a property for a >day? Request copies of you phone pinging off a local tower for 24 hours?

What makes you think that Revenue won't ask for bills? They are looking for more tax from the property owner. It's the property owners job to provide evidence they used it for 31 days to avoid paying VHT, if the owner doesn't provide suitable evidence they'll be hit with VHT.

Peregrinus

https://www.boards.ie/discussion/comment/121095694#Comment_121095694

It's a self-assessment tax. That means that, if the Revenue reject your assessment and substitute their own, they need some basis for doing so; otherwise the Appeal Commissioners will find that their assessment is not supported. They can reasonably ask you for a statement of the actual nights you spent in the house (and therefore you should keep a diary or other record of this) and they can look at your utility bills, etc (which you must provide, so keep them too) for corroboration. But they can't object that no record exists of something for which, on the basis of the facts your are asserting, no record would assist. The fact that your central heating wasn't running over the June bank holiday weekend doesn't mean that you weren't there.

I suppose they could call for your credit card/bank accounts to show whether you bought, e.g, petrol or groceries in the area on the weekends that you claimed you were there (or, alternatively, whether you did spend money in some completely distant and very different place on those weekends, which would pretty much put the kibosh on your self-assessment). But, to be honest, I don't see them going to that level of detective work for what is, in the scheme of things, a pretty small amount of Revenue unless they already have pretty good reason to know that you are lying to them. I don't expect this to happen very often.

Emblematic

There's a house near me that has been empty for some time. Apparently it it owned jointly by two brothers who can't agree on what to do with it. Hopefully this tax will focus their minds a bit.

DownByTheGarden

https://www.boards.ie/discussion/comment/121095694#Comment_121095694

Ive been dealing with revenue for about 30 years. They never asked for a bill for any source of income. They asked that I keep receipts expenses etc, but I doubt very much that they would be too pushed about you keeping an electricity bill to prove what days you were staying in your property. The most they have ever actually asked me to send were receipts when i paid avcs. Thats it. Everything else you keep for a few years, but you never actually have to send in. Bills on a holiday home i doubt will ever be needed. Its not any stretch of the imagination at all to justify that yourself, family or friends stayed in your property overnight for 30 days in a year.

It wont exactly be hard to simulate property occupation for 30 days. These statements sound like the person in another thread who said that government agents are waiting for anyone on the dole who goes on holidays.

They might happen but they would be rarer than watching Ireland Ireland getting to the soccer world cup final for any individual.