I rented out my home without notifying the bank or the Revenue

S

sandal

Registered User
Messages
1
I know this is discussed in a few places but I am just wondering if anyone else is in the same position as myself?

I own an apartment and rented it out some time ago without letting my bank nor revenue know. I know I should have but I just can't afford an increase in my mortgage and also cannot afford losing the TRS.

I am starting to feel very worried that I will be 'found out' and I fear what may happen. Am I thinking about it too much or what do others advise?

Are other people in the 'same boat' as me?

Any advice welcome.
 
sandal said:
I know this is discussed in a few places but I am just wondering if anyone else is in the same position as myself?
Click to expand...
Yes - it has - and within the last couple of weeks, a previous thread exactly on this subject springs to mind. It would be worth your while to run a search.

sandal said:
I own an apartment and rented it out some time ago without letting my bank nor revenue know. I know I should have but I just can't afford an increase in my mortgage and also cannot afford losing the TRS.
Click to expand...
Few would blame you! I know if I was in this position (and there are a set of circumstances that could bring this about for me too at some point) - I would do the same.

From what I understand, the points of weakness could be PRTB registration - it's a judgement call - but I would say, don't do it! The other would be insurance documentation. I'm not sure what lender your with - but mine insist on getting a copy of the insurance policy each year (if I have changed insurance provider....which invariably I do - in order to get the best deal). What's stated on that policy could indicate the status of your property - so some thought needs to go into that.


sandal said:
Are other people in the 'same boat' as me?
Click to expand...
Purely speculative on my part ...but I would be inclined to think there are a LOT of folks in the 'same boat' as you in this regard.
 
Many people ,even those like me who are doing everything correctly at great expence, will understand your position. Some will wish they had the nerve to do what you are doing.

The same people, including me, will feel annoyed that they are jumping through all the hoops, constantly paying money and filling in forms -whilst you get off scot-free and are saving money, in effect, at our expence.

So what are you asking ? For people "in the same boat" i.e. fellow tax-cheats to tell you how they are getting on ? How to continue getting away with it ? Or what?

You must know that if you come clean you'll pay a penaltywith revenue/PRTB etc. The longer you leave it the greater the penalty. But on the other hand you may get away with it for ever .

In the meantime I and the rest of us continue to pay,pay and pay.
 
Well the likelihood is that you will be found out at some stage.

You may be caught for the NPPR, which will flag the fact that you have a property you don't live in, which would then flag the fact that you haven't got a PRTB reg, and that you haven't returned any rental income to Revenue...

You may feel that you don't have any choice other than to do what you're doing, but you need to be aware that if / when you get caught out, it'll cost you a substantial amount of money.
 
serotoninsid said:
Yes - it has - and within the last couple of weeks, a previous thread exactly on this subject springs to mind. It would be worth your while to run a search.

Few would blame you! I know if I was in this position (and there are a set of circumstances that could bring this about for me too at some point) - I would do the same.

From what I understand, the points of weakness could be PRTB registration - it's a judgement call - but I would say, don't do it! The other would be insurance documentation. I'm not sure what lender your with - but mine insist on getting a copy of the insurance policy each year (if I have changed insurance provider....which invariably I do - in order to get the best deal). What's stated on that policy could indicate the status of your property - so some thought needs to go into that.



Purely speculative on my part ...but I would be inclined to think there are a LOT of folks in the 'same boat' as you in this regard.
Click to expand...

What you are suggesting is breaking the law, fraud and tax evasion. While I understand the OP's position is tough, why should the rest of us who are already struggling be the ones to pay?
 
shesells said:
What you are suggesting is breaking the law, fraud and tax evasion.
Click to expand...
It's the OP's query and it's the OP who makes his/her own decision on that - not me.

shesells said:
While I understand the OP's position is tough, why should the rest of us who are already struggling be the ones to pay?
Click to expand...
I wouldn't presume to know the extent and specifics of the OP's situation. However, your both quite right. The right thing to do is to ensure tax compliance regardless of the circumstances.
 
shesells said:
What you are suggesting is breaking the law, fraud and tax evasion. While I understand the OP's position is tough, why should the rest of us who are already struggling be the ones to pay?
Click to expand...

It's easy to be on the moral high ground, but sometimes circumstances dictate people's decisions.

If you were in the same situation as the OP you might well find yourself making decisions you'd always have believed unthinkable.

As long as the OP is prepared to accept the consequences if / when they get caught, who are you or I to judge.
 
mandelbrot said:
It's easy to be on the moral high ground, but sometimes circumstances dictate people's decisions.

If you were in the same situation as the OP you might well find yourself making decisions you'd always have believed unthinkable.

As long as the OP is prepared to accept the consequences if / when they get caught, who are you or I to judge.
Click to expand...

Because I am someone who never planned to be a landlord but ended up as one. We make major sacrifices to do everything above board with our former home. It costs us money to rent that house out, but it is something we have to do. And so I feel strongly about people evading tax and not registering the property as rented as the OP has done. Why should those of us who do things by the book shoulder the burden (and the bad reputation) for those who don't?
 
You may be making sacrifices, but I presume you're keeping your head above water. There is no question that there are people who, if they did everything by the book, would simply end up in default and out on their ear.

If people make the choice to shirk their responsibilities as a lifestyle choice, because it would mean they couldn't have their foreign holiday or upgrade the car, that's a very different kettle of fish.

What I'm saying is unless you know all the circumstances don't rush to judgement.
 
I presume that this is the main question?
sandal said:
I am starting to feel very worried that I will be 'found out' and I fear what may happen. Am I thinking about it too much or what do others advise?
Click to expand...
The prudent thing here would be to come clean and regularise your situation with regard to the rental property in my view. Ignoring unresolved tax (e.g. evading tax on rental income and fraudulently claiming TRS) issues simply compounds the risks involved in eventually being "found out" - which I presume are already high (e.g. as soon as tenants claim the rent tax credit etc.). Not much more to be said about it as far as I can see.
 
I found myself unexpectedly in that situation. I've been trying to sell for 3 years when an agent said he had an excellent person who wished to buy but needed to rent first. I was an extremely reluctant landlord. However, I changed my insurance for the house to a Landlord's Insurance policy. Last year things had got so bad I couldn't even afford my usual accountant but I did manage to do an online tax return in October for the tax year April 2010 to April 2011. Guess what? I got a tax refund!!! Get help, get advice, and take the action. Peace of mind is priceless.
 
Well, as I said previously, if decisions are being made to facilitate maintaining a particular level of lifestyle, there's only one bit of advice you're likely to get here OP - register and pay what you owe.

If for no other reason than that it will cost you money in the long run if you don't. If you don't register with the PRTB, you lose any deduction for interest against rental income - so when Revenue catch up with you, you will owe them 41% income tax plus PRSI and Income levy / USC, on the total amount of rent received. Plus you'll owe interest and penalties on top. Interest is about 11% p.a., and the penalty could be anywhere from 15% - 100% of the tax not returned / paid.

So, as it is with you now, you're sitting on a financial timebomb... it's going to go off, but you don't know when, or at what cost. At this stage (assuming you're getting €750 - €1k p.m. in rent since mid-'09) you probably owe over €10k already, and it's accruing at about €500 p.m... if you had done things correctly, your interest deduction would probably cover most of the rent, so you would owe very little tax on rental income. Essentially you may only be worse off to the tune of the TRS lost, and possibly a different interest rate, but at least you wouldn't be looking over your shoulder waiting for the inevitable.
 
Good point - owner occupier TRS pales in comparison to the ability to write off 75% of mortgage interest against rental income when situations such as this are handled above board.
 
The banning of interest deductions for non-PRTB registered properties is having the effect of criminalising and financially ruining people for the sort of relatively minor tax offence that used to be easily resolved by retrospectively filling a few tax returns. The ruinous penalties attaching to non-compliance are utterly disproportionate to the offence. It should be repealed.
 
But in the meantime the original poster would probably be best advised to work within the existing rules?
 
They are in a genuine catch-22. They have no choice but to try to retrospectively register for PRTB (which will alert their lender) and file tax returns, but it is a mess and they probably need proper legal/tax advice before they do anything.
 
You must log in or register to reply here.
Back
Top