Property tax residents or landlord?

Tim Robbins · 06-01-2012 11:06am #1

Hi,
What's the norm? Landlords pay property tax or tenants do?

I am an (accidental) landlord. I am already paying:
- Mgt fees
- PTRB fees
- Wear and tear
- NPPR tax
and of course
- Interest
- Tax

Cheers.
TR

D3PO · 06-01-2012 11:11am

you pay it its very clear and answered in the FAQ's at www.householdcharge.ie

Paulw · 06-01-2012 11:12am

Property owner pays.

The property owner is legally liable for the tax, not the tenant.

Ste.phen · 06-01-2012 11:16am

Landlord pays but will/may/should/will try to factor it to the rent next time it comes up for review, I imagine

wyndham · 06-01-2012 11:21am

Tim Robbins wrote: »

Hi,
What's the norm? Landlords pay property tax or tenants do?

I am an (accidental) landlord. I am already paying:
- Mgt fees
- PTRB fees
- Wear and tear
- NPPR tax
and of course
- Interest
- Tax

Cheers.
TR

Are you not insured?

TMC99 · 06-01-2012 11:25am

wyndham wrote: »

Are you not insured?

Probably included in the Mgmt fee I would guess (for an apartment anyway)

Tim Robbins · 06-01-2012 11:57am

TMC99 wrote: »

Probably included in the Mgmt fee I would guess (for an apartment anyway)

Included in mgt fee for building. Not insured for contents. Can't afford it. Already loss making bit time.

seamus · 06-01-2012 12:01pm

Yes, the payment is your responsibility, though I see no moral issue in passing the entire cost onto the tenant in the next rent review considering that the charge is for local services.

I would say there is no "norm" at present, but that most landlords intend to include it in the rent in future.

athtrasna · 06-01-2012 12:12pm

Tim Robbins wrote: »

Hi,
What's the norm? Landlords pay property tax or tenants do?

I am an (accidental) landlord. I am already paying:
- Mgt fees
- PTRB fees
- Wear and tear
- NPPR tax
....
- interest

All of these are tax deductible either fully or partially. I know more taxes are always painful but your post makes it look like you are paying all the above and then a load of tax. Unless you're renting a palace out, your tax liabilities should be small when all the above are deducted.

NIMAN · 06-01-2012 12:40pm

When you become a LL you know what you are going to have to pay, so there's always the option of not being a LL if you don't like it.

And I say this as a LL myself who will have to pay 2 household charges myself before March.

Spiritofthekop · 06-01-2012 2:39pm

seamus wrote: »

Yes, the payment is your responsibility, though I see no moral issue in passing the entire cost onto the tenant in the next rent review considering that the charge is for local services.

I would say there is no "norm" at present, but that most landlords intend to include it in the rent in future.

My rent is coming down next month if my landlord tried to include it in my rent the next time I would walk out immediately.

Its a owner property tax which is going to increase year on year no doubt.

Are you going to continue to add it to the rent every year when the scum increase it?...cause they will.

Good luck keeping/finding tenants if you do decide too.

Wile E. Coyote · 06-01-2012 2:45pm

Spiritofthekop wrote: »

Its a owner property tax which is going to increase year on year no doubt.

Are you going to continue to add it to the rent every year?

Good luck finding tenants if you do decide too.

If it does increase year on year, good luck finding a landlord who won't include the cost in your rent.

jimogr · 06-01-2012 2:45pm

Tim Robbins wrote: »

Already loss making bit time.

If you're making a loss then you shouldn't be paying any tax on it.

seamus · 06-01-2012 2:47pm

Spiritofthekop wrote: »

Its a owner property tax which is going to increase year on year no doubt.

Actually it's a "household charge", clue is in the name. The only reason that the government didn't apply it to households is because they want to maximise the income and property owners are easier to chase than renters.

"Year on year" is probably being a bit alarmist. When they figure out how to change it into a non-fixed charge, then most people will see it increase, but after that increases will be nominal at best. It's one of the places where you can't keep continually squeezing people, unlike VAT or excise, because people can't adjust their usage accordingly.

Are you going to continue to add it to the rent every year?

Good luck finding tenants if you do decide too.

I'm not a landlord or a renter, but I would have no issue paying it included in my rent if I were.

The NPPR charge is a property charge which tenants should not be required to bear the cost on.

Spiritofthekop · 06-01-2012 3:08pm

seamus wrote: »

Actually it's a "household charge", clue is in the name. The only reason that the government didn't apply it to households is because they want to maximise the income and property owners are easier to chase than renters.

"Year on year" is probably being a bit alarmist. When they figure out how to change it into a non-fixed charge, then most people will see it increase, but after that increases will be nominal at best. It's one of the places where you can't keep continually squeezing people, unlike VAT or excise, because people can't adjust their usage accordingly.
I'm not a landlord or a renter, but I would have no issue paying it included in my rent if I were.

The NPPR charge is a property charge which tenants should not be required to bear the cost on.

The Household Charge

The Household Charge is an annual charge introduced by the Local Government (Household Charge) Act 2011 which is payable by owners of residential property. It is a matter for owners of residential properties to register and pay the Household Charge on or after the 1st of January 2012. The EU/IMF Programme of Financial Support for Ireland commits the Government to the introduction of a property tax for 2012

It says its to pay for local upkeep of area. Which in turn will/might keep the value of the owners property at a desirable value if they wished to sell in the long run.

Its got nothing to do with a tenant who is only renting the house out for a short period in most situations.

I have many friends who own a couple of properties and all of them acknowledge its their payment and not the tenants, maybe in the silly years it could of been added in by greedy landlords but its not as easy to get away that anymore as reality has finally kicked in.

Also the owner property tax will go up and up and up...and up.....overtime...that you can be sure off!

P. Breathnach · 06-01-2012 3:21pm

Wile E. Coyote wrote: »

If it does increase year on year, good luck finding a landlord who won't include the cost in your rent.

In the short-to-medium term the supply of rental properties will be fairly fixed. Basic economics tells us that where the supply is fixed, the cost of supply has no effect on price. The chance of bumping up rents to recover cost increases is negligible.

In the longer term (God knows how long!) uneconomic properties may be withdrawn from the rental market, and rents will cover the cost of supply.

But it's not that simple: the "cost of supply" will be a notional figure reflecting the current market value of the property rather than its historic cost or the cost of servicing a mortgage on it.

TMC99 · 06-01-2012 3:35pm

jimogr wrote: »

If you're making a loss then you shouldn't be paying any tax on it.

Not the case - you can make a loss and have to pay USC on the rental income. In addition the OP did not saying he was paying any tax ?

jimogr · 06-01-2012 3:40pm

TMC99 wrote: »

Not the case - you can make a loss and have to pay USC on the rental income. In addition the OP did not saying he was paying any tax ?

He does:

Tim Robbins wrote:

and of course
- Interest
- Tax

USC is not payable on the total rental income, allowable expenses are deducted first.

athtrasna · 06-01-2012 3:43pm

jimogr wrote: »

If you're making a loss then you shouldn't be paying any tax on it.

It depends on whether there is an actual loss ie allowable expenses and deductions exceed the rent...or whether the rent doesn't cover and mortgage and expenses, which I think is what the OP was saying.

Tax is payable on all income less deductible expenses and allowances. Some people seem to think that if your mortgage is €1k a month and you're getting €800 a month in rent, that qualifies as a loss and tax doesn't have to be paid. That is not the case.

TMC99 · 06-01-2012 3:46pm

jimogr wrote: »

USC is not payable on the total rental income, allowable expenses are deducted first.

Are you sure of this - understood it was on all income - not just profit ? Also don't believe NPPR is deductible ?

odds_on · 06-01-2012 4:50pm

Spiritofthekop wrote: »

My rent is coming down next month if my landlord tried to include it in my rent the next time I would walk out immediately.

Its a owner property tax which is going to increase year on year no doubt.

Are you going to continue to add it to the rent every year when the scum increase it?...cause they will.

Good luck keeping/finding tenants if you do decide too.

So you move out of a property because the landlord will increase the rent.
You move into a new property where you think the rent may be reasonable but in fact the new landlord has the household charge included.
Your old landlord includes the new charge for his next tenant.
All the landlords get the charge covered by the tenants.

I can't really see the sense - especially if you are happy where you are at present.

inforfun · 06-01-2012 5:02pm

That tax is €100,00, isnt it?
€8,00 (and a bit) a month.
Landlords who are going to put this charge into the rent will probably look for a profit on this charge and increase rent by €15/25 a month just to keep a nice round amount.

Spiritofthekop · 06-01-2012 5:10pm

odds_on wrote: »

So you move out of a property because the landlord will increase the rent.
You move into a new property where you think the rent may be reasonable but in fact the new landlord has the household charge included.
Your old landlord includes the new charge for his next tenant.
All the landlords get the charge covered by the tenants.

I can't really see the sense - especially if you are happy where you are at present.

Yeah I would, no problem.

Plenty of other places to live.

borderlinemeath · 06-01-2012 5:23pm

Spiritofthekop wrote: »

Yeah I would, no problem.

Plenty of other places to live.

So how do you know the new landlord or, ahem as you like to call them "scum":rolleyes: aren't taking the household charge into account in the rent they're advertising?

You won't know, and odds on they will include it. You and every tenant that moves based on this will pay one way or the other.

zac8 · 06-01-2012 5:36pm

borderlinemeath wrote: »

So how do you know the new landlord or, ahem as you like to call them "scum":rolleyes: aren't taking the household charge into account in the rent they're advertising?

You won't know, and odds on they will include it. You and every tenant that moves based on this will pay one way or the other.

Sure you can use irishpropertywatch.com to figure that out.

Spiritofthekop · 06-01-2012 6:10pm

borderlinemeath wrote: »

So how do you know the new landlord or, ahem as you like to call them "scum":rolleyes: aren't taking the household charge into account in the rent they're advertising?

You won't know, and odds on they will include it. You and every tenant that moves based on this will pay one way or the other.

"Scum" is a word I used to describe our "goverment" not LL's if you want re-read what I said. The "goverment" will increase the new owner property tax two fold over the next 3/5 years..wait and see.

Plenty of apartments empty at the moment because landlords wont take a loss on their mortgage re-payments in the vain hope the goverment will give them debt forgiveness.

Suck it up and offer what the market is. Rent is not going up.

seamus · 06-01-2012 6:16pm

Spiritofthekop wrote: »

Rent is not going up.

I would be quite so arrogant about that.
All of the most recent reports show measurable, if modest, increases in rents countrywide.

http://www.daft.ie/report/philip-osullivan

Spiritofthekop · 06-01-2012 6:27pm

seamus wrote: »

I would be quite so arrogant about that.
All of the most recent reports show measurable, if modest, increases in rents countrywide.

http://www.daft.ie/report/philip-osullivan

Well mine & a friend of mine who both live in "supposedly most desirable area's of Dublin" both have our rents coming down this month.

Sure I can only speak for myself.

n900guy · 06-01-2012 6:27pm

seamus wrote: »

Actually it's a "household charge", clue is in the name. The only reason that the government didn't apply it to households is because they want to maximise the income and property owners are easier to chase than renters.

I think there will be two taxes. The problem is the stupid government who make up the names. Just like the pension levy had nothing to do with pensions, the household charge has nothing to do with a household.

1. The new "household charge" is really like the Grundsteuer in Germany - a yearly property tax payed by the owner based on the property's valuation. This is usually around €300-400 per year on a €200-250k property in Germany.

2. A Council Tax equivalent like the UK which will be paid by the tenant and likely will include the television license. If the current naming system is anything to go by, it will have absolutely nothing to do with councils.

2.

Tim Robbins · 07-01-2012 10:09pm

NIMAN wrote: »

When you become a LL you know what you are going to have to pay, so there's always the option of not being a LL if you don't like it.

Not really. I can't sell it. I had no intent of becoming a landlord. I bought it when I was single in the bubble, and then got married and our family live in my wife's apartment which she bought in the bubble. Terrible finacial mistakes but the same for thousands of others.

Most people who become landlords either intentionally or accidentally haven't a clue what they have to pay and pay an accountant to do it.

That's just my own experience.

I cover my mortgage before tax but not after tax. As for the actual capital loss, well on a one bed apartment, it's over 6 figures.

Tim Robbins · 07-01-2012 10:14pm

Spiritofthekop wrote: »

Plenty of apartments empty at the moment because landlords wont take a loss on their mortgage re-payments in the vain hope the goverment will give them debt forgiveness.

Very true. It would be interesting to see how many of these mortgage arrears were buy-to-let mortgages. I remember the business post running articles in the bubble telling investor to get interest only loans for 400K and rent out their two beds...

Property tax residents or landlord?

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