Tax on 2nd property

ticn99 · 10-09-2019 1:15pm #1

I ended up as an unexpected landlord when the economy crashed. I bought a house for a family of 5 and my 2 bed apartment never sold,
I've never declared tax on the rental. If I was to declare it now would I have to pay back tax on it or just start paying from now?

TheShow · 10-09-2019 1:18pm

It depends on when you declare as first receiving rental income.
Legally, ethically & morally you should declare it from when you first commenced renting the property and thus you will be liable for back tax.

phildin · 10-09-2019 2:02pm

You'll have to state the date that you started to receive the rent. You'll need to pay the back tax but if you're completely upfront it might be that they'll consider waiving some penalties on the basis that it's a voluntary disclosure. They may also be a bit more accommodating about having a repayment schedule.

If instead you make a false declaration and are subsequently found out, you will then be in a very different position. You will have deliberately mislead Revenue (and so have broken the law) and you will have no goodwill to draw upon with them; that means paying the back tax along with potential interest and fines.

If it were me, I would go to an accountant in order to establish the true position and then have them write a letter on my behalf outlining this position in full to Revenue. Yes this will cost money but having someone on your side who knows the rules and knows how to negotiate means they could end up paying for themselves and even if they don't, it should be way less daunting just having someone to go to for advice.

Calahonda52 · 10-09-2019 8:43pm

ticn99 wrote: »

I ended up as an unexpected landlord when the economy crashed. I bought a house for a family of 5 and my 2 bed apartment never sold,
I've never declared tax on the rental. If I was to declare it now would I have to pay back tax on it or just start paying from now?

Depending on the level of debt and thus the level of bank interest paid on the rented gaff, your tax bill might be small enough. look at other allowable expenses as well
https://www.revenue.ie/en/property/rental-income/irish-rental-income/index.aspx

Are you registered with the PRTB?
https://www.citizensinformation.ie/en/housing/renting_a_home/registering_a_tenancy.html

Have you made tax returns and left out the rent?

ted1 · 10-09-2019 8:44pm

Talk to revenue before they talk to you. Their fines can be excessive

Spanish Eyes · 10-09-2019 8:50pm

ted1 wrote: »

Talk to revenue before they talk to you. Their fines can be excessive

Mostly warranted I'd say. It's the deterrent effect.

relax carry on · 10-09-2019 9:03pm

Time for a disclosure.

https://www.revenue.ie/en/self-assessment-and-self-employment/making-a-disclosure/index.aspx

ticn99 · 13-09-2019 9:13am

Thanks for all the advise...
I'm aware I was wrong in not declaring but now my fear is, it's been rented out for 10 years

By self declaring is there anyway of limiting the penalties to say; 3, 5 years or has revenue any standard in how hard they hit you?

Most of that 10 year period the rent wasn't covering what we had to pay in mortgage so I guess subconsciously we decided the fact we were barley able to afford if we didn't pay any of the relevant taxes we should have during the period

Any suggestions on specialist accountants that have experience in dealing with such a mess?

Calahonda52 · 13-09-2019 10:39am

Its not a mess unless you think it is.

There is no time limit for them looking back.

Starting point is do you have all the supporting documentation for the 10 years?

For example do you have statements of interest paid for the 10 years.
Do you have receipts for things like insurance, repairs, capital item purchases and the other things listed in one of the earlier links?

You also need to say if you have made tax returns in the 10 years and left out the rental.?

Tax on 2nd property

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