Register with PRTB: any exemption for non investors who cant sell their house?

[Moggy]

Hi,

Before meeting my wife she had her own apartment and I had my own house. We then tried to sell her apartment before getting married but did not even get a viewing.

After leaving it on the market for 8 months we have been forced to rent. We could not afford both mortgages and had to borrow to cover mortgage of the apartment...now the money has run out, we are left with a pretty hefty loan and still have the apartment. As a consequence we have been forced to rent. Now I'm really worried that the tenants are going to ask for rent relief and we'll be stung for not being registered.

I know this is a long shot, but is there any legislation to cover our situation?

We do not want to register because that would mean commiting to this long term and neither of us want to get into the landlord business. We just want to ride the storm and sell the apartment as soon as possible.

But from what I can see we are being forced into it, what a fooked up system Cowen has created here! Someone please tell me he is not a complete muppet and has covered this situation?

 

[sam h]

Re: Should I register?

Registering (assume you man with the PRTB) does not commit you long term, but in order to claim interest relief, you must be registered. If you are hoping to slip under the radar & not pay tax on the income, you are running a very high and real risk of being caught and having large penalties.

Can you drop the price of the apartment to try and get a faster sale?

 

[Moggy]

Re: Should I register?

Registering (assume you man with the PRTB) does not commit you long term

It does in the sense that we will have to pay CGT when we do eventually sell, so basically it will not be worth selling anymore and we'll be in it for the long haul.

but in order to claim interest relief, you must be registered. If you are hoping to slip under the radar & not pay tax on the income, you are running a very high and real risk of being caught and having large penalties.

Can you drop the price of the apartment to try and get a faster sale?

So you are saying there is no leeway for a situation like this? We dropped the price as much as we could. The catch that forces people to register to claim interest relief doesn't affect us because it was my wifes home and she had already registered for relief. We're not crossing our fingers hoping to slip under the radar, we're just hoping that there is a certain amount of leeway for non investors who cannot live in their home and can't sell it either.

 

[sam h]

Re: Should I register?

I'm not aware of any leeway (not an expert), but ultimately Mr Taxman will say that you have earned an income from the property and you will have to pay tax on that income. I assume you know of the things you can write off as expenses (interest, repairs & replacements, cleaning, PRTB, etc), so depending on the circumstances, you may not have much of a tax bill.

Are you on an interest only mortgage for the rented property, this would keep you outgoings down until you sell? You probably need to do your figures to see what you do next.

 

[Moggy]

Re: Should I register?

I'm not aware of any leeway (not an expert), but ultimately Mr Taxman will say that you have earned an income from the property and you will have to pay tax on that income.

If the rent does not cover the mortgage is it still classed as income?

 

[sam h]

Re: Should I register?

The amount of the mortgage is completely irrelevant, it is the interest portion that is deductable. If the interest + other expenses is greater that the rental income, then you have a rental loss and no tax due, but in order to get this you must be registered with the PRTB.

 

[ubiquitous]

Re: Should I register?

Moggy, if you are trying to evade CGT or income tax on rental income, you will not get any assistance in this regard on AAM.

 

[Moggy]

Re: Should I register?

Moggy, if you are trying to evade CGT or income tax on rental income, you will not get any assistance in this regard on AAM.

Sorry I gave that impression I've removed my comment above about CGT. I'm not trying to evade anything, I'm just asking do I need to register or is there an exemption for non investors who cannot sell their home and are forced to rent.

 

[asdfg]

Re: Should I register?

we will have to pay CGT when we do eventually sell, so basically it will not be worth selling anymore and we'll be in it for the long haul.

You will eventually sell the apartment maybe not today or even within the next year.
CGT is calc as Gain in value of the property less expenses * Period
property let in months less 12 months /total period of ownership in months
So only a small part may be liable to CGT

I'm just asking do I need to register or is there an exemption for non investors who cannot sell their home and are forced to rent.

Afaik you have to register. Failure to register can leave you open to a criminal prosecution and you can't deduct interest relief from your rental income. Registeration costs €70 per tenancy.

See also the [broken link removed]

The catch that forces people to register to claim interest relief doesn't affect us because it was my wifes home and she had already registered for relief.

If by registered for relief you mean that she is claiming TRS. TRS afaia is only available for residences which are your Principal Private residence.
As the apartment is no longer her PPR she is now living with you, she can no longer claim this relief. She can however claim TRS on your property provided you have not used up all the relief.

 

[webtax]

Re: Should I register?

But from what I can see we are being forced into it, what a fooked up system Cowen has created here! Someone please tell me he is not a complete muppet and has covered this situation?

Why would legislation be written to cover your particular circumstances and how is it Brian Cowens fault? If you didn't get a viewing in eight months then it looks like you may well end up renting long term, and you don't have any option on registering with the prtb and making income tax returns anyway.
Trying to evade your legal obligations will only end up making a bad situation worse.

 

[Satanta]

Re: Should I register?

Someone please tell me he is not a complete muppet and has covered this situation?

The calculation of CGT, as outlined above by asdfg, is what covers this situation.

If you only rent for a short term, you only pay a small fraction of the total gain in CGT.

 

[ajapale]

Re: Should I register? (..with the PRTB)

But from what I can see we are being forced into it, what a fooked up system Cowen has created here! Someone please tell me he is not a complete muppet and has covered this situation?

You can post this kind of comment in Letting Off Steam. Otherwise this thread should be kept to discuss the substantive issue of whether you should register with the PRTB or not

I might be wrong but my understanding is that if you are renting property then you are obliged to register.

 

[z106]

Re: Should I register?

I'm just asking do I need to register or is there an exemption for non investors who cannot sell their home and are forced to rent.

This statement doesn't make any sense.

When you say you can't sell what you actually mean is you can't sell it for the price you would like.

Everything has a price.

E.g. If you put it up for a sale for a fiver then I'm sure that it would be snapped up immediately in which case u would be able to sell it.

Obviously i'm exaggerating to stress the point.

Ina a nutshell you can sell it if you lower your price appropriately.

That's why no legislation exists or people who can't sell their homes.
The reason being that person doesn't exist because everyone can sell their homes once they have a realistic asking price.

 

[Moggy]

Re: Should I register?

Ina a nutshell you can sell it if you lower your price appropriately.

I already said we lowered it as much as we could. This is not a question of greed, its a combination of the downturn and other factors I'm not going to get in to. We're not giving the apartment away, we might as well just hand the keys over to the bank and save ourselves the hassle.

I might be wrong but my understanding is that if you are renting property then you are obliged to register.

OK so you think I am obliged to register, thanks for your input.

You will eventually sell the apartment maybe not today or even within the next year.
CGT is calc as Gain in value of the property less expenses * Period
property let in months less 12 months /total period of ownership in months
So only a small part may be liable to CGT

This is similar to what I had in mind. Needless to say I am pretty clueless in these things, hence me posting my question. But based on your calculation we do have some leeway. Thanks for the info.

I also take on board from all the other posts that we must register with the PRTB. Thanks for the help.

 

[Moggy]

Re: Should I register? (..with the PRTB)

5. What is the PRTB doing about unregistered landlords?
The steps being taken by the PRTB to pursue compliance with the registration requirement are in accordance with the provisions of the Residential Tenancies Act 2004 and, in particular, sections 144 and 145. They include the issue of notices to landlords and/or occupiers of the dwellings in question, and the prosecution of offenders for non-compliance with the registration requirement. Details of these notices are set out below.

Landlord 1st Notice - section 144(2)

Where the landlord’s address is available to the PRTB, a notice is served on the landlord stating that in the PRTB’s opinion there is a tenancy in the dwelling in question that requires to be registered and that an application for registration must be made. The notice requests the landlord to furnish within 14 days the reasons why the landlord may consider that they do not have to register.

Landlord 2nd Notice - section 144(3)

Where the landlord fails to respond to the 1st notice, within the 14 day period or a response was received within the 14 day period which did not result in the PRTB changing their opinion on the registration requirement applying, a notice is served on the landlord stating that the landlord is required to register within 14 days and failure to register within this timeframe will result in the landlord being guilty of an offence under the Residential Tenancies Act 2004.

Occupier’s Notice - section 145(4)

Where the landlord’s name or address is not supplied, a notice is served on the occupiers requiring them to supply within 14 days any information in their possession that could lead to the PRTB ascertaining the identity of the landlord or of his/her address. That notice also states that failure to respond within the 14 days will result in the occupier being guilty of an offence under the Residential Tenancies Act.

Here you are from the PRTB website. So in conclusion there is quite a fair amount of leeway for people in my situation, both with this and also with the CGT calculations pointed out by asdfg. And I might add this is all legit, so think twice before you accuse someone of tax evading.

 

[ajapale]

Re: Should I register? (..with the PRTB)

From prtb.ie:

1. What is the tenancy registration system?
It is a requirement on all landlords to register details of their tenancies within one month of their commencement on form PRTB1 available from this website. The information on the register will be used to provide aggregate data on the private rented sector. Personal details such as the tenant name, landlord name, rent, etc. will not be made public.
2. What dwellings are exempt from the tenancy registration system?

Business premises, even where partly residential

A dwelling to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies (i.e. formerly rent controlled dwelling occupied by the “original tenant” or his/her spouse) or to which Part II of the Landlord and Tenant (Amendment) Act 1980 applies (i.e. long occupation equity lease tenancies)

A dwelling let by a local authority or voluntary housing body

A dwelling occupied under a shared ownership lease

A holiday let

A dwelling in which the landlord is also resident

A dwelling in which the spouse, parent or child of the landlord is resident and there is no written lease or tenancy agreement

A dwelling that is occupied rent free

If a dwelling is available for renting but has not yet been let, there is no requirement to register.
3. Will the PRTB provide confirmation of exemption from the tenancy registration system ?
No, the PRTB will not routinely provide for individuals confirmation of exemptions from the tenancy registration system.
4. What happens if I don't register?
Until such time as a tenancy has been entered onto the PRTB’s register of tenancies, the PRTB is precluded from dealing with any dispute relating to the tenancy that may be referred to it by the landlord. The registration requirement applies only to ongoing tenancies so it is important that the registration process be completed as quickly as possible in case any difficulties arise in relation to the tenancy.
5. What is the PRTB doing about unregistered landlords?
The steps being taken by the PRTB to pursue compliance with the registration requirement are in accordance with the provisions of the Residential Tenancies Act 2004 and, in particular, sections 144 and 145. They include the issue of notices to landlords and/or occupiers of the dwellings in question, and the prosecution of offenders for non-compliance with the registration requirement. Details of these notices are set out below.

 

[Moggy]

Re: Should I register? (..with the PRTB)

ajapale read your own post.

Details of these notices are set out below.

And in the details below that they are talking about:

a notice is served on the landlord stating that the landlord is required to register within 14 days

 

[ajapale]

Re: Should I register? (..with the PRTB)

ajapale read your own post

Moggy, I dont understatd why you are asking me to read my own post (its simply a quote from the prtb website).

 

[webtax]

Re: Should I register? (..with the PRTB)

Here you are from the PRTB website. So in conclusion there is quite a fair amount of leeway for people in my situation, both with this and also with the CGT calculations pointed out by asdfg. And I might add this is all legit, so think twice before you accuse someone of tax evading.

I'm not sure what "leeway" you are concluding is available re the prtb - you have one month to register.
Your additional quote states: " a notice is served on the landlord stating that the landlord is required to register within 14 days". I may be misinterpreting you, but it seems that you think that you can wait til the prtb find you and then register within 14 days. Note that you cannot back-date a registration and you will not be entitled to claim mortgage interest deduction against your rental income from any years prior to when you register as discussed here: http://www.askaboutmoney.com/showthread.php?t=66152

 

[Trustmeh]

Re: Should I register? (..with the PRTB)

Have you considered that if you do decide to rent out the apartment that you may have stamp duty clawback to pay as well? As the apartment was once your PPR and now is treated as an investment. I believe the rule is based on if you purchased the apartment within the last 5 years.