Non Principal Private Residence Tax - Late Payment Extortion

So it turns out the government decided an uncapped 120% interest rate on the NPPR charge was suitable - compared to say a capped at 130 euro fee on the household charges - either cause they thought they could get away with it or cause of just general incompetence (“never attribute to malice that which is adequately explained by stupidity”, and all that...).

For us living abroad - they decided that even though there was no possible way we could know about the tax, we still needed to pay along with late fees accrued. I’ve just had to fork over 2240 euro - primarily made up of late charges.

Nobody seems to care either - they just say ‘well, its in the legislation, end of story’.

The Irish times recently had an article on this - '[broken link removed]" , along with a number of letters by people in similar situations.

The NPPR late payment trap



Would really appreciate that if anyone else was stung by this shakedown, can they add their comments to above article? I very much doubt it was just a few of us.

You have a fair enough point of view I think but it is very marginal, owning property in any part of the world brings responsibilities, had you advice or help with submission of your annual tax returns, if so your advisor should have pointed this out, if you assumed that responsibility yourself then you assumed it and you should have picked this up, being absent does not negate your responsibility on keeping an eye on what is happening with your property investment at home.

I had a tax advisor - doing my taxes for the year. She said as it was council tax it was not her department, so she neglected to tell me about it.

I had an estate agent looking after my house - she 'thought' I knew about it already.

I had the county council looking for the money. They said they put sufficient ads in the local & national media to cover the issue. They also said that they put ads in media in centers of high Irish population overseas (I'm in Malaysia, so that was not covered).

What should have been done I feel is:
* Letters dropped into each house that could be applicable. I was registered for the PRTB - that would have been a good place to start with that.
* A late penalty that is capped. Why do they think 120% interest is required here? Interest rate that high is extortionate, what you would expect from a money lender, and quite frankly just plain sleazy.

I think your beef here should be with your Tax Advisor, not the Government. I think it's appalling that you had a Tax Advisor looking after your interests and they did not advise you of this.

I had sympathy for you on reading your first post. However, your second post gives a more balanced account of what happened. As you say ' cause of just general incompetence (“never attribute to malice that which is adequately explained by stupidity”, and all that...).

That lies right at your accountant and to a lesser extent, your letting agent. So, you really should focus your anger on these. Change accountants and letting agents before they leave you with more tax bills or uncollected rents for months.

SarahMc said:

I think your beef here should be with your Tax Advisor, not the Government. I think it's appalling that you had a Tax Advisor looking after your interests and they did not advise you of this.

Click to expand...

Totally agree. A tax advisor who did not understand what the NPPR was and the implications of not paying it, is not worth paying!

I would suggest you write a cheque for the amount outstanding without penalties and a cover letter to your county council and ask them to accept this as final payment. Explain the circumstances and see what happens. They may accept this but keep any documents in case of problems later i.e in case of sale.

What's a "late payment fee"?


The Act provides that, if a charge is not paid within a month after the last date for payment, a late payment fee will apply for every month or part of month that the €200 charge remains unpaid. For 2009, this means that the late payment fee will apply to all payments made after 31st October 2009 and for 2010 and subsequent years it will apply to all payments after 30th June of that year. The late payment fee amounts to €20 per month or part of a month and will continue to roll up as long as the charge remains unpaid and the amount involved can be substantial.

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Wow! I had not appreciated this at all. So if you should have paid €200 on 31 October 2009 but didn't pay it until June 2013, you would have been charged an extra €840 (42 x €20)

I suspect that this would be open to a court challenge. Fines must be proportionate. Something like a €100 late payment fee and 1% per month would be appropriate enough. You might get a pro-bono SC's opinion on this from Ross Maguire of [broken link removed]

You could claim

Hardship

Thanks Brendan - thats an interesting read.

What flabbergasts me the more I look into it is the lengths they have to go to to get around the original extortionate late payment penalty. The big long web page they had to put together for this, all the 'apparent' ads they put in the media for it, a whole load of memos & rules like this hardship policy letter.

I would just love to know the logic in applying such a penalty on *just* this one tax, when other taxes have nothing like this kind of penalty and is usually capped.

Is it just a case where some junior civil servent put it in the bill, it got passed without anyone really looking into it and doing the maths, and then they refuse to admit they made a mistake.

It is of the opinion of others that if this tax was taken to the high court, it would fail due to excessive penalties (google "NPPR late payment trap irish times" for letter on Friday 28th June). Now its just a matter of getting the lawyer fees together to bring it to the high court

As I said, you should be able to get Counsel's opinion free of charge.

Brendan

I've just checked up the legislation again on this - in the 2011 amendment, it seems to re-define the person liable to pay the NPPR as being the person who the rent is paid to, which would seem to be the agent?

Any thoughts/advice?

Its section 18 - at the 2011 legislation - google "local government house hold charge act 2011". Actual text:

(vii) by substituting the following definition for the definition of “owner”:
“ ‘owner’, in relation to a residential property,
means—
(a) a person (other than a mortgagee not in
possession) who—
(i) in the case of a residential property
that is let under a lease or held under
a tenancy for a term not exceeding 20
years, is entitled to receive the rent
under that lease or tenancy, whether
in his or her own right or as trustee
or agent for another person, or
(ii) in the case of a residential property
that is not so let or so held, would,
subject to paragraph (b), be so
entitled if the residential property
were so let or so held, whether in that
person’s own right or as trustee or
agent for another person,
or
(b) where the property is let under a lease or
held under a tenancy for a term exceeding
20 years, the person (other than a mortgagee not in possession) who is the lessee
under that lease or the tenant under that
tenancy;”,

Sorry but I'm not sure I really believe that someone with a property in Ireland, paying tax on their rental income here etc would not have been aware of the NPPR. Any occasional look at Irish news websites over the past 3 years should have made anyone aware of the charge.

On the contrary, when I was living abroad I seldom read the Irish websites and I would not have been aware of what was going on back home unless I was told. I was too busy doing other things which were lots more important at the time.

I think it a bit harsh to blame the OP really and just assume he is just "chancing his arm". The OP had paid an accountant, estate agent etc that should have made him aware of the NPPR.

Exactly - I should have been contacted by one of three different agents, the council, my estate agent and my tax agent. While I do read the newspapers online fairly regularly - the NPPR just did not stand out to me & the first time I'd even heard of that phrase was a few weeks ago.

Secondly - just before i was going I was partially aware of a 'second home' tax. THats all how I remember it - only as a second home tax. I'm not sure if that was just a convenient short-hand for the media, or that was how it was advertised by the government at the time??? From reading blogs - it seems like I'm not the only one who got confused by this.

Thirdly - its the scale of the penalty which is way beyond what other taxes have as late fees. Like I said - the household charge is capped. Why was this not? If you were out of the country for 10 years, your looking at a fine thats over 10k? How can this be justified? This fine will *cripple* some people - it nearly crippled me, this is really not a good time for me to have to fork out 2.2k - not that anytime would be a good time.

As it's almost impossible to get Irish papers outside the main resorts/cities one resorts to the internet and I agree with OP that this would never have featured as a main story -if at all- over the years on news websites.

But it's not only for ex-pats; the problem extends to many owners of second properties living in Ireland.
To be bluntly snobbish about it there is a high degree of semi-literacy in Ireland, and beyond reading the headlines in the sporting section of the Sun there are tens of thousands who wouldn't properly read the papers- not that there was ever much NPPR advertising in the press.

And if they do watch/hear the news on TV/radio was there much repeat information about NPPR? I vaguely recall it being advertised a few times -but then I'm a news-freak.

Reading this thread I was minded to ask a handy-man acquaintance who was doing some work at my house about a second property he'd bought some years ago.
yes, he said , he'd paid his property-charge last year and this year.
I said ,no, I mean the second home tax.
Yes, he'd paid the PRTB letting that property....

After explaining at this stage he owes a few thousand euros NPPR and charges I still had to show him all the info on the internet. I doubt the poor man understood what I was showing him. And I don't think he's properly grasped that he owes thousands of euros.

Whilst ignorance of the law is no excuse I agree that the punishment is so OTT that I'm surprised that there's been no legal challenge to it.

There has been legal challenges - a Mr Finbarr Whelan challenged Dublin City Council on the late fees in December 2012 and lost. I was forwarded on a report on the case by my good friend in the local council office as a kind of a "you don't stand a chance - give up now". See attached

However, I cannot see the document or any reference to the case on the internet after a brief search.

If you do a bit of googling - there are many letters to the papers, blog posts on the same. This tax has screwed so many people so far and its only just started. Its going to get a lot worse over the next few years when people discover they have 5-10k fines, which likely they'll only discover when they're selling their houses.

Has anyone complained to the Ombudsman's office on this?

Hi JDP

That seems to be a case in the Small Claims Court and so would have no precedence value.

All it says is that the Council is not obliged to notify people in advance, which I would agree with anyway.

The key question is whether the penalties for late payment are proportionate. That needs to be challenged in the High Court.

Thanks Brendan. I assume any challenge in the high court would cost far more than the penalties? So very likely it would never happen?