Not paying tax on rental income-good idea?

N

nelly

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Recently I met someone who is renting two houses in an Irish city and never registered as a landlord. He thought i was crazy when i mentioned it. It seems to me that he may not be declaring this income and had never been approched to register for rental allowance as the houses were rented to students who obviously did not look for these tax credits.

What do you make of this? he has had the houses well over 10 years and could be walloped with an awful tax bill if they look into it. If they don't I'm thinking its not a bad game to get into myself instead of paying into a pension fund for the next 35 years...?
 
Re: not paying tax on rental income.

nelly said:
What do you make of this? he has had the houses well over 10 years and could be walloped with an awful tax bill if they look into it.
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IF he is evading tax then hopefully they will catch up with him sooner rather than later and extract the outstanding liabilities etc. out of him. Where tax evasion is known to be going on then there is an obvious way of helping to accelerate this process.
 
Re: not paying tax on rental income.

I woud not be the one to accelerate it to be honest as I don't know maybe he does pay tax on it. But if it is something the tax man turns a blind eye to it seems like a nice little venture.
 
Re: not paying tax on rental income.

nelly said:
But if it is something the tax man turns a blind eye to it seems like a nice little venture.
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Maybe they have in the past. Will this continue in the future? Who knows. You don't pays your tax, you takes your chances.......
 
Re: not paying tax on rental income.

yep - i couldn't take the chance! alarm bells were deafening me the more i thought of it! Ignorence of the tax system is no defence either.
 
Re: not paying tax on rental income.

Speaking as a former landlord if your friend is evading tax (stealing from the people of Ireland) then I hope he gets caught and heavily penalised. I do not understand why people think this is acceptable. We are spending tens or hundreds of millions of Euros investigating tax evasion and corruption by some politicians and property developers. I find that the same people who are vociferous in their criticism of these activities are ambivalent about tax evasion by "normal people" like small scale landlords, builders, trades-people doing nixers and teachers giving grinds etc.
The bottom line is if your friend chooses to engage in a criminal activity it may well turn out to be a "nice little earner" but I for one hope he is done for it.
 
Re: not paying tax on rental income.

I like this one, being a numbers man myself...

[broken link removed]
 
Re: not paying tax on rental income.

nelly said:
I woud not be the one to accelerate it to be honest as I don't know maybe he does pay tax on it. But if it is something the tax man turns a blind eye to it seems like a nice little venture.
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You -and every other tax payer are paying for this. It has been stated that if all black economy was stamped out it would equate to a 3-4% reduction in taxes. Your aquaintance is part of this black economy-Revenue do not tolerate this and neither should any citizen. Its pure greed and selfishness not to pay taxes that are due to the state. Quite rightfully Revenue are clamping down on this and receiveing lots of money into the exchequer.
 
Re: not paying tax on rental income.

A lot of landlords pay no tax on rental income and are not worried about being caught. The governments true position on this issue can be ascertained by looking at the rent allowance scheme . This is a scheme whereby large amounts of taxpayers money is paid to landlords. However there is no requirement for a landlord to either register with the PRTB or pay tax before they receive their state handouts. The revenue has tried repeatedly over the years to get the government to give it details of which landlords it is paying money to and how much it is giving them for tax assessment purposes. The government has refused. For the government to then say that landlords "should" pay tax on rental income is stunning hypocrisy.
 
Re: not paying tax on rental income.

madisona said:
The revenue has tried repeatedly over the years to get the government to give it details of which landlords it is paying money to and how much it is giving them for tax assessment purposes. The government has refused.
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Do you actually mean "the government" here or a specific organisation such as Social Welfare or the HSE or something?
For the government to then say that landlords should pay tax on rental income is stunning hypocrisy.
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But this doesn't make it hypocritical for compliant taxpayers to complain about the genuine rip-off of tax evasion though.
 
Re: not paying tax on rental income.

ClubMan said:
Do you actually mean "the government" here or a specific organisation such as Social Welfare or the HSE or something?
But this doesn't make it hypocritical for compliant taxpayers to complain about the genuine rip-off of tax evasion though.
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I mean the HSE but they get the money from the government who gets it from the taxpayer ( who is unlikely to be a landlord)

I never said that it did, but the ire of compliant taxpayers should be directed as much towards the politicians that facilitate tax evasion as the landlords. Many PAYE taxpayers would similarly evade tax if the government was as accomadating to them
 
Re: not paying tax on rental income.

madisona said:
I mean the HSE but they get the money from the government who gets it from the taxpayer ( who is unlikely to be a landlord)
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But the specific issue then is that the HSE can't/won't pass the necessary info on to Revenue presumably? Perhaps there is a data protection/privacy issue here?
but the ire of compliant taxpayers should be directed as much towards the politicians that facilitate tax evasion as the landlords.
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I strongly disagree. While there may be something further that the government can do to address this situation the main/ultimate culpability for tax evasion lies with the perpetrator of the evasion and to attribute blame elsewhere is fallacious in my opinion.
Many PAYE taxpayers would similarly evade tax if the government was as accomadating to them
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And they would be just as cuplable as any other tax evader.
 
Re: not paying tax on rental income.

madisona said:
Many PAYE taxpayers would similarly evade tax if the government was as accomadating to them
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and if there was no fear of getting caught and having to repay this. which was my origional point.
Having been in college for 4 years a while ago now I never saw a rent book and in some places only bank draft or cash was acceptable. When it is cheaper/ convienient location/ only place about then it is going to be taken no questions. So i suppose i probably already have condoned evasion of tax.
which is why i am perplexed that Revenue have not clamped down.
 
Re: not paying tax on rental income.

Luternau said:
You -and every other tax payer are paying for this. It has been stated that if all black economy was stamped out it would equate to a 3-4% reduction in taxes.
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I'm no fan of tax evaders, but i don't believe this for one second - politicians find ways of blowing whatever revenues they have available, sure we'd just go out and give the Roches an extra 500m for the toll bridge or something!!
 
Re: not paying tax on rental income.

ClubMan said:
But the specific issue then is that the HSE can't/won't pass the necessary info on to Revenue presumably? Perhaps there is a data protection/privacy issue here?
I strongly disagree. While there may be something further that the government can do to address this situation the main/ultimate culpability for tax evasion lies with the perpetrator of the evasion and to attribute blame elsewhere is fallacious in my opinion.
And they would be just as cuplable as any other tax evader.
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There is no data protection/privacy issue. Fianna Fail tried that excuse when they were challenged on the matter and it was comprehensively debunked. It would be very easy for the government to make payment of tax by a landlord a condition of giving them the money. or to tell the HSE that they would not get the money unless they allowed Revenue to see who it was being given to.

and while I agree that ultimate culpability is with the tax evader I am personnaly more outraged that the government is blatantely facilitating this evasion. The only valid reason for the governments decision to withold this information from the Revenue is to facilitate tax evasion, therefore statements from government politicians that landlords "should" pay tax are hypocritical nonsense. The same by the ways goes for registration with the PRTB. On the one hand they say it is the law and on the other hand they refuse to make it a requirement of receiving rent allowance payments.
 
Re: not paying tax on rental income.

they get the money from the government who gets it from the taxpayer ( who is unlikely to be a landlord)
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I refute that-I am a landlord and always pay my taxes. As for registration of tenancies-this is now compulsary. So if a landlord has not done this, and is not paying tax they are coommiting two misdemeanors. People that pay rent to a landlord that does not provide their tax details is only aiding this evasion. I would shop my landlord if that was the case.
Private Rental in Ireland is a growing reality. The sooner the government regulate the whole thing the better. I lved in Swtitzerland for a while and 80% rent. The system is the fairest I have ever witnessed and there is no evasion of taxes in Switz-its just not possible to do so!
 
Re: not paying tax on rental income.

Luternau said:
I refute that-I am a landlord and always pay my taxes. As for registration of tenancies-this is now compulsary. So if a landlord has not done this, and is not paying tax they are coommiting two misdemeanors. People that pay rent to a landlord that does not provide their tax details is only aiding this evasion. I would shop my landlord if that was the case.
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then you are in the minority of landlords that does. Of course registration and payment of tax is compulsary. Then why is it the the case that the majority of landlords pay no tax and are not registered and that they do this with impunity. They are well aware that Revenue will not come after them. I don't think that you can blame it on tenants either. They often have to take what they can get. As only a small minority of landlords bother registering their tenancies they would be severly restricting their options.
 
Re: not paying tax on rental income.

I take great exception to your comments madisona. I pay and have always paid my taxes and I was a landlord for 7 years. I know two other landlords and they always pay their taxes. Your opinion is ill informed and your comments are offensive. They betray a bias that if directed toward an ethnic group, rather than what you perceive as an economic one, would be considered racist.
 
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