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Overseas landlord query please.

Graces7

Would be grateful for a knowledgeable answer please.

I booked this house via an agent,and paid deposit and first month's rent to them as they asked. The letter said I must pay on a set day by direct debit.

Set up the standing order and it went through.

The landlord lives abroad.

Just had an email from the agent telling me to pay the landlord direct now, into an Irish bank account so am wondering? Is this usual? I thought the agent would go on handling the landlord's account etc?

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Gumbo

Graces7 wrote: »

Would be grateful for a knowledgeable answer please.

I booked this house via an agent,and paid deposit and first month's rent to them as they asked. The letter said I must pay on a set day by direct debit.

Set up the standing order and it went through.

The landlord lives abroad.

Just had an email from the agent telling me to pay the landlord direct now, into an Irish bank account so am wondering? Is this usual? I thought the agent would go on handling the landlord's account etc?

Agents offer 2 services.

The complete Package : Rental advertisement, tenant screening and viewing, management of property - all for a monthly fee (usually one months rent per year)

Letting Arrangement : They advertise, arrange viewings, screen tenants, organize deposits etc etc and then they step back.

Paulw

Maybe the landlord is no longer using the services of the agent.

Also, if your landlord is overseas, then it is your legal obligation to withhold 20% in tax, to be paid to the Revenue.

murphaph

If the agent is not acting as an agent for the remainder of the tenancy then you need to ask who is because in the absence of an agent, the tenant is obliged to deduct 20% of the rent and forward to revenue, furnishing the LL with a form R185 promptly at the start of each new tax year.

Mrs OBumble

Yes, it is quite normal: LL's fire their agents all the time.

By comparison for the house I own overseas, the law in that country now requires me to have a local agent. But there is no such law in Ireland and LL's can choose to manage aspects of the tenancy themselves.

But as others have stated, you do need to be sure that the LL understands your tax obligations.

If you are not paying tax otherwise, then you should contact Revenue and ask how they want to handle getting the cash from you.

And of course it's more complicated because you are on RA ... I guess that means the County Council also has send 20% of their contribution to the LL. Perhaps you would be better to talk to them before you talk to Revenue, to see how they've handled it for other people. (It won't be the first time they've had this situation.)

Graces7

The agent has told me in writing to send the full rent to the landlord at her Irish bank account.

Peregrinus

Graces7 wrote: »

The agent has told me in writing to send the full rent to the landlord at her Irish bank account.

Maybe she did, but do not rely on the agent to advise you on your obligations under Irish tax law. The agent does not act for you or in your interests.

Contact the Revenue and they advise that you need to withhold 20% of the rent and send it to them (whcih I think they will) then reply to the agent saying you'll be lodging 80% of the rent to the nominated account and sending the remaning 20% to the Revenue.

[Deleted User]

Expect a notice of arrears if you pay 80% of the rent.

Browney7

Coen Glamorous Manicurist wrote: »

Expect a notice of arrears if you pay 80% of the rent.

Or expect the landlord to know the rules associated with being an overseas landlord.....

blindside88

Op is it possible that the landlord is moving back to Ireland and therefore wants the money paid into his/her account as they will be replacing the agent going forward

76544567

What happens with an landlord living overseas, who comes home to Ireland and and revenue come looking for the tax that should have been paid by the tenant. Say after 5 years living in the property the tenant hasnt been paying the tax, but has just moved off to Timbuktu forever.
Is the landlord liable?

[Deleted User]

Browney7 wrote: »

Or expect the landlord to know the rules associated with being an overseas landlord.....

How does the tenant know that the LL isn't looking after their own tax affairs.

Because people are actually hearing about this 20% deduction rule I've seen one or two LL recently make sure the tenants don't known they live abroad, I'd expect more LL to do the same as time goes on.

Browney7

Coen Glamorous Manicurist wrote: »

How does the tenant know that the LL isn't looking after their own tax affairs.

Because people are actually hearing about this 20% deduction rule I've seen one or two LL recently make sure the tenants don't known they live abroad, I'd expect more LL to do the same as time goes on.

Even if the landlord is fully tax compliant it's cut and dry, if you are paying rent to a bank account of a landlord who's place of abode is overseas you as the tenant have to pay 20% of the rent to Revenue.

These are the rules, landlords may not like them but they are the rules of the game. Hard to know how revenue will know but you bring a whole world of pain on yourself messing with them

Lumen

Coen Glamorous Manicurist wrote: »

How does the tenant know that the LL isn't looking after their own tax affairs.

Because people are actually hearing about this 20% deduction rule I've seen one or two LL recently make sure the tenants don't known they live abroad, I'd expect more LL to do the same as time goes on.

Equally, I would expect tenants to seek a statement from the landlord that they do not live abroad, in order to protect themselves against Revenue liability.

Sarn

Hopefully a lease has been signed. Otherwise I wouldn't be very comfortable raising this with a non-resident LL before Part IV rights have been obtained. While there is a requirement to retain 20% for revenue, a request to vacate the property, for some reason, could be received because the tenant is 'being difficult'.

listermint

Lumen wrote: »

Equally, I would expect tenants to seek a statement from the landlord that they do not live abroad, in order to protect themselves against Revenue liability.

No no it's cool for tenants to be complicit in tax avoidance.

That right nox? Because you are skirting around the issue.

[Deleted User]

Browney7 wrote: »

Even if the landlord is fully tax compliant it's cut and dry, if you are paying rent to a bank account of a landlord who's place of abode is overseas you as the tenant have to pay 20% of the rent to Revenue.

These are the rules, landlords may not like them but they are the rules of the game. Hard to know how revenue will know but you bring a whole world of pain on yourself messing with them

You see that incorrect it's if they are tax resident outside Ireland for a start so straight away we have a flaw in the withholding rent.

listermint wrote: »

No no it's cool for tenants to be complicit in tax avoidance.

That right nox? Because you are skirting around the issue.

If a LL wants to dodge tax that's his business a tenant should mind their own or move.

amcalester

Coen Glamorous Manicurist wrote: »

You see that incorrect it's if they are tax resident outside Ireland for a start so straight away we have a flaw in the withholding rent.

If a LL wants to dodge tax that's his business a tenant should mind their own or move.

Not when the tenant is the one the revenue will chase for the money.

[Deleted User]

amcalester wrote: »

Not when the tenant is the one the revenue will chase for the money.

I agree it's a ridiculous rule and from my understanding one which revenue never enforce.

listermint

Coen Glamorous Manicurist wrote: »

You see that incorrect it's if they are tax resident outside Ireland for a start so straight away we have a flaw in the withholding rent.

If a LL wants to dodge tax that's his business a tenant should mind their own or move.

Solid advice nox.

Not.

athtrasna

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Browney7

Coen Glamorous Manicurist wrote: »

You see that incorrect it's if they are tax resident outside Ireland for a start so straight away we have a flaw in the withholding rent.

If a LL wants to dodge tax that's his business a tenant should mind their own or move.

http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-45/45-01-04.pdf?download=true

amcalester

Coen Glamorous Manicurist wrote: »

I agree it's a ridiculous rule and from my understanding one which revenue never enforce.

Well there's one way to ensure you're not the first...

[Deleted User]

Browney7 wrote: »

http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-45/45-01-04.pdf?download=true

Non-resident means not tax resident, even if the wording is a bit unclear there is no way a person who's salary is paid to them in Ireland and they pay Irish income tax on it has to be treated as a non resident LL if they live abroad.

amcalester wrote: »

Well there's one way to ensure you're not the first...

Most tenants of non-resident LLs don't even know they are non-resident somit would be next to impossible to find against a tenant imo.

amcalester

Coen Glamorous Manicurist wrote: »

Most tenants of non-resident LLs don't even know they are non-resident somit would be next to impossible to find against a tenant imo.

The OP does though.

Why take the risk?

Mrs OBumble

Coen Glamorous Manicurist wrote: »

I agree it's a ridiculous rule and from my understanding one which revenue never enforce.

Not true.

[Deleted User]

Mrs OBumble wrote: »

Not true.

It being ridicilous or the non-enformemt as if it's the latter you will need to show some proof.

76544567

Coen Glamorous Manicurist wrote: »

Most tenants of non-resident LLs don't even know they are non-resident somit would be next to impossible to find against a tenant imo.

So when revenue come knocking and the tenant has left the country never to return, who pays.

[Deleted User]

76544567 wrote: »

So when revenue come knocking and the tenant has left the country never to return, who pays.

It's the LL they should be following, it crazy to expect tenants to enforce tax law expexially as 95% of people don't even know they are supposed to. The only reason I ever heard about it was reading about it in this forum.

76544567

Coen Glamorous Manicurist wrote: »

It's the LL they should be following, it crazy to expect tenants to enforce tax law expexially as 95% of people don't even know they are supposed to. The only reason I ever heard about it was reading about it in this forum.

If that's the case then the landlord should make sure the tenant withholds no more eyes for tax, if living a road.

Peregrinus

76544567 wrote: »

So when revenue come knocking and the tenant has left the country never to return, who pays.

The landlord pays.

The 20% payment by the tenant is received by the Revenue on account of the landlord's liability to Irish income tax. If, in fact, he has no income tax liability, or his liability is less than the amount received from the tenant, the landlord gets a full or partial refund from the Revenue; if his liablity exceeds what the tenant has paid over, the landlord is liable for the difference.

The tenant has a secondary liability. If it comes to the Revenue's attention that the tenant hasn't been withholding (and the tenant is still around) the Revenue can chase the tenant for the amount that should have been withheld.