# Implications for not paying NPPR?



## cbruen1 (20 Jun 2011)

Hi, so there's this person - let's call them a friend - that has owned a 2nd property in Dublin since 2005. The plan on buying it was to have it as a pension as friend is self-employed and doesn't have a private pension. 

My friend didn't realise or more correctly paid scant attention to the NPPR charge when it came in, as it was initially referred to as a holiday home tax and said friend didn't have a holiday home, only an apartment in Dublin that's rented out. So no NPPR has been paid on the apartment up until now.

So now my friend is starting to worry as there are fines building up and also it looks like there could be a charge against the property when the time comes to sell it (this could well be 25 years from now when the mortgage is paid off). So some questions:

 - What will happen if my friend doesn't pay the NPPR?
 - If my friend does pay before June 30th this year, can they claim that they only own the property for a year (i.e. tell porkies) or will they be liable for the previous years plus the fines also?
 - When my friend goes to sell the property in 25 years and the NPPR has never been paid, what's likely to happen?

Any other info much appreciated.

Many thanks.


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## beffers (20 Jun 2011)

Currently, the late fee is 20 euros per month, on top of the actual NPPR charge itself of 200 euros per year. If you pay up a full year after its March 31 due date, that is a whopping 240 euros he has to pay in late fees, per year. So, do the sums.... 200 euros times 25 yrs is 5,000 euros. 240 euros times times 25 years is 6000. Your "friend" is looking at having to pay 11,000 before he can sell the property, and over half of that is late fees. That is a pretty stupid situation to get into imo. 200E is not a ton of money. Tell him to just get over it and pay it. There is no way around it. 

If he owns a second home, he owes the tax. End of story. Whether or not he uses it as a holiday home, or an income generating rental property is irrelevant. There is another thread here about whether or not the NPPR tax is deductible as a legitimate business expense, so you may want to have him consult a tax attorney about that possibility.

When he goes to sell the property, his solicitor will need proof that all taxes and liabilities on it have been paid, including the NPPR tax. The property can not be sold if he can not do that, as the other sides solicitor will also want proof that all debts and liabilities owing on the property have been paid. Again, there is no way around that. 

If your friend does not pay this tax for 25 years, there is no guarantee that all he will ever have to pay is the 200 euros yearly amount and late fees. As the years go by and he never ever pays the tax, the local authority (to whom the NPPR tax is paid) may very well instigate proceedings against him to get their money. That may well lead to additional fines, penalties etc etc.


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## Mrs Vimes (20 Jun 2011)

Hi Beffers, you're right about being unable to sell the property without paying the charge, but way off the mark on how much would be owing.

If he sold the property in 25 years without ever paying the NPPR he would in fact owe closer to *90,000* euro (It's 240 per year on each outstanding charge).

Pay it, it's not worth the risk.

Sybil


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## cbruen1 (20 Jun 2011)

Ok thanks for the updates. My friend has never received a demand for the tax - does this make a difference?


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## Mrs Vimes (20 Jun 2011)

No, it's up to the house owner to declare it.


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## elcato (20 Jun 2011)

When your 'friend' goes to pay it online they will calculate the fees due as they ask the person the enter the years it is owed. BTW - Has your 'friend' made a tax return for all the years it has beem let out ? Revenue will not be so forgiving.


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## cbruen1 (20 Jun 2011)

elcato said:


> BTW - Has your 'friend' made a tax return for all the years it has beem let out ? Revenue will not be so forgiving.



Yes friend has made tax returns for each year it's been let out...does this make a difference?


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## Greta (20 Jun 2011)

cbruen1 said:


> Yes friend has made tax returns for each year it's been let out...does this make a difference?



Tax returns prove that he has been letting out this property, so he'd be very unwise to claim he has only owned the rental property for 1 year to dodge the fines.

Is he also registered with PRTB? If not, he should ASAP, otherwise the interest on his investment mortgage is not tax deductible.


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## cbruen1 (20 Jun 2011)

Greta said:


> Tax returns prove that he has been letting out this property, so he'd be very unwise to claim he has only owned the rental property for 1 year to dodge the fines.



Well it may be unwise but my friend physically doesn't have the money and he wanted to pay the current 200 and not let it roll over again, so he doesn't have a choice really. The mortgage repayment is now about 250 more than the rental income and management fees are 150 per month, so there's a shortfall of 400 euro per month. This coupled with the fact that the property is worth probably 70 to 80 k less than what he paid for it.

I know it's dodging the fines but he can't magic money out of nowhere.  Is there any way he could talk to Dublin city council or come to some arrangement on the fine, maybe pay it off over time or something?


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## dave28 (20 Jun 2011)

What is the position with an apartment willed to children which has to be sold & proceeds divvied up ?  Does the executor have to pay the NPPR - and what if there isnt enough money in the kitty while waiting for apt to be sold ?


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## gm88 (20 Jun 2011)

dave28 said:


> What is the position with an apartment willed to children which has to be sold & proceeds divvied up ? Does the executor have to pay the NPPR - and what if there isnt enough money in the kitty while waiting for apt to be sold ?


 
Yes Dave. When the sale is going through, the Solicitor for the purchaser requests proof that NPPR has been paid up to date. Have had personal experience of this, so it's better to pay up.  Unfortunately, our sale fell through, so we (the beneficiaries) are paying the NPPR ourselves until a sale is reached.


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## SPUDZ (20 Jun 2011)

There are a few exemptions as you will see from the FAQ on the website.It is due on ALL houses that are not your PPR...(you can only have ONE PPR at any given time...it doesn't matter if the house in question is rented/unoccupied/holiday home etc.Even if you only own one house...if you don't live in it...you must pay the fee.


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## Nige (21 Jun 2011)

dave28 said:


> What is the position with an apartment willed to children which has to be sold & proceeds divvied up ? Does the executor have to pay the NPPR - and what if there isnt enough money in the kitty while waiting for apt to be sold ?


 

Until probate is granted, there is no NPPR for the period since the owner died. From www.nppr.ie



> *Probate *
> 
> Where there is a property whose owner is deceased, there is no person meeting the definition of owner in the Local Government (Charges) Act until letters of administration or probate have been granted.  Where letters of administration are required, the person who is granted administration becomes the owner for the purposes of the Act.  In a probate case, the executor becomes the owner on the issue of probate.  Only at that point does liability kick in.


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## Greta (22 Jun 2011)

cbruen1 said:


> Well it may be unwise but my friend physically doesn't have the money and he wanted to pay the current 200 and not let it roll over again, so he doesn't have a choice really. The mortgage repayment is now about 250 more than the rental income and management fees are 150 per month, so there's a shortfall of 400 euro per month. This coupled with the fact that the property is worth probably 70 to 80 k less than what he paid for it.
> 
> I know it's dodging the fines but he can't magic money out of nowhere.  Is there any way he could talk to Dublin city council or come to some arrangement on the fine, maybe pay it off over time or something?



It's better to pay at least the current 200, so fines of 20 per month won't be accruing on it. But 20 per month WILL be accruing on the previous year's charge, for EACH year, until it's paid.

He should register to pay NPPR charge, and pay as much as he can. The rest will be rolling over at 20 euro per month per year unpaid, until paid, so it's his choice really - to "borrow" the money from his Council at 10% interest PER MONTH (20 is 10% of 200, and that's the fine per month), or to find the money somewhere else.

It's better to get up to date on this now than in 25 years...

I suspect NPPR charge is a delayed time bomb, there are probably lots of people who don't pay, maybe don't even know that they should pay, and sometime down the line they are going to be in for a very nasty shock...


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## Bronte (22 Jun 2011)

cbruen1 said:


> Well it may be unwise but my friend physically doesn't have the money and he wanted to pay the current 200 and not let it roll over again, so he doesn't have a choice really. The mortgage repayment is now about 250 more than the rental income and management fees are 150 per month, so there's a shortfall of 400 euro per month. This coupled with the fact that the property is worth probably 70 to 80 k less than what he paid for it.


 
How is the negative equity tied to the fact that he cannot pay the NPPR. 

The NPPR works out at about 3.8 Euro's per week. 

He should certainly start to pay the 200 and make a start on the backlog.  This charge has a serious fine built into it and the co councils etc are only delighted with it.  He should pay the NPPR for all years, that will stop the fine accruing,as far as I know there is no penalty interest if you haven't paid the fine, only if you haven't paid the NPPR itself.  He can then take his time paying the fine.   

Can he sell the property and pay back the negative equity if it doesn't make sense financially for him to be subsidising it.


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## cbruen1 (22 Jun 2011)

Bronte said:


> How is the negative equity tied to the fact that he cannot pay the NPPR.


The point being made is that this is another cost added to the existing shorfall in mortgage vs rent, and the lower value of the property.



Bronte said:


> He should certainly start to pay the 200 and make a start on the backlog. This charge has a serious fine built into it and the co councils etc are only delighted with it.


This isn't a fine it's extortion. If any lending institution tried to charge interest rates anywhere near this they wouldn't be allowed. 



Bronte said:


> He should pay the NPPR for all years, that will stop the fine accruing,as far as I know there is no penalty interest if you haven't paid the fine, only if you haven't paid the NPPR itself. He can then take his time paying the fine.


So is it possible to pay the 200 without paying the fine part, and stop the fine accruing?



Bronte said:


> Can he sell the property and pay back the negative equity if it doesn't make sense financially for him to be subsidising it.


If he sells the property he's looking at a loss of 70 - 80k, also properties just aren't selling. He is happy to subsidise it and is doing so like thousands of others in the same boat. What he's not happy about is the council bringing in extortion masquerading as a fine.


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## peteb (22 Jun 2011)

Well if he isn't happy with the "extortion" then he should have paid more attention when becoming a landlord.  He was obviously smart enough to correctly know he had to submit a tax return on the rental income.  And the NPPR was fairly widely publicised at the time.


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## cbruen1 (22 Jun 2011)

peteb said:


> Well if he isn't happy with the "extortion" then he should have paid more attention when becoming a landlord.  He was obviously smart enough to correctly know he had to submit a tax return on the rental income.  And the NPPR was fairly widely publicised at the time.



He became a "landlord" years before the nppr and its associated extortion was introduced.


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## beffers (22 Jun 2011)

Extortion or not, there was a large ad in todays Irish Independent advising people to pay the tax by July 1st or the late fees will start accruing for 2011. Perhaps your friend could get a grace period from the apts management company regarding their monthly fee & he could divert the funds towards the NPPR. Am sure that the mgt company will not be thrilled at the prospect, but at least they can not charge him a late fee each month. The Corpo can !

Perhaps you should suggest to your friend should pop into his local citizens information office every so often, and get himself up to speed on what the legal and financial obligations of being a landlord are, what may have changed since last year, or what new legislation/taxes/fees may have been recently introduced. If he made the assumption that the NPPR tax did not apply to him as the apt was not a holiday home, or that he shouldn't have to pay it if he wasn't sent a bill, he may be in need of guidance from a trained professional. He can get it there for free.


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## Greta (23 Jun 2011)

cbruen1 said:


> He became a "landlord" years before the nppr and its associated extortion was introduced.



So did I, but it didn't stop me noticing the introduction of NPPR charge and paying it, even though I don't even live in Ireland!

The charge itself - 200 euro per year - is NOT extortionate (yet), it's actually quite small. As to late payment fines - it's very easy to avoid them - just by paying the charge on time


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## cbruen1 (24 Jun 2011)

Greta said:


> So did I, but it didn't stop me noticing the introduction of NPPR charge and paying it, even though I don't even live in Ireland!
> 
> The charge itself - 200 euro per year - is NOT extortionate (yet), it's actually quite small. As to late payment fines - it's very easy to avoid them - just by paying the charge on time



That's great for you Greta it's a pity the entire world isn't as organised and together as you 

If you've read the thread you'll see that my friend owes the fines for 2009 and 2010. He's aware of how to avoid them, the problem is that he wasn't aware of how extortionate the fines are and they have now built up to 1040 euro.

So does anyone know of a way to pay the 200 euro for 2009 and 2010 and put off paying the fine part? My friend tried to do it via the website but it won't allow it.


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## beffers (24 Jun 2011)

If he wants to do it online, he has to pay all of what he owes. The website calculates what you owe, if there is a fine owing, and that is what it expects you to pay. Found myself in that very same boat last year. If he wants to pay less than that, I suggest he goes in to the office of the local authority to whom he owes the money, and see if they will accept a check for the lesser amount for now. They may say yes, they may say no, but there has to be a method of payment and good old fashioned human interaction for people who do not have access to the internet.


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## mandelbrot (24 Jun 2011)

The word extortionate is being bandied about here quite a bit...

Surely the point of a financial penalty such as the €20p.m. on the NPPR is to act as a deterrent to ensure that people do not do exactly what the OP originally came on here to ask about?

If every owner of an NPPR just decided to just not pay the thing at all, and deal with it in (say) ten years time when selling the property, then the NPPR charge wouldn't be able to achieve it's objective, which is to get money into the exchequer ASAP.


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## Bronte (24 Jun 2011)

Same story as Greta here, many years abroad and NPPR paid on time.  No problem paying it either, just hope the money wasn't wasted by the county council.  They clean the roads, provide as much water as one wants and empty the bins etc.  Someone has to pay for those services. 

The PRTB thing is what scared me, lot scarier than the NPPR.  Which I didn't fully realise at the time even though I began to register in 2005 (prior to the mortgage interest rule)  

If I were your friend I would forth with send a registered letter with 3 cheques for each year of the NPPR, clearly stating that the amounts are for the NPPR for each year and then he will be paying them by instalment (say 20 euro a month) until the penalty is cleared and asking can he do this by direct debit.  Then the penalty stops increasing and he tackles the arrears.


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## cbruen1 (24 Jun 2011)

Bronte said:


> If I were your friend I would forth with send a registered letter with 3 cheques for each year of the NPPR, clearly stating that the amounts are for the NPPR for each year and then he will be paying them by instalment (say 20 euro a month) until the penalty is cleared and asking can he do this by direct debit.  Then the penalty stops increasing and he tackles the arrears.



Thanks Bronte that's good advice I'll get him to look into it.


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## RMCF (24 Jun 2011)

Bronte said:


> Same story as Greta here, many years abroad and NPPR paid on time. No problem paying it either, just hope the money wasn't wasted by the county council. *They clean the roads, provide as much water as one wants and empty the bins e*tc. Someone has to pay for those services.
> 
> The PRTB thing is what scared me, lot scarier than the NPPR. Which I didn't fully realise at the time even though I began to register in 2005 (prior to the mortgage interest rule)
> 
> If I were your friend I would forth with send a registered letter with 3 cheques for each year of the NPPR, clearly stating that the amounts are for the NPPR for each year and then he will be paying them by instalment (say 20 euro a month) until the penalty is cleared and asking can he do this by direct debit. Then the penalty stops increasing and he tackles the arrears.


 
Not round here they don't.

I have to buy tokens to get my bins emptied. 

Plus they will soon be charging me for my poor quality water supply too.


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## elcato (24 Jun 2011)

> I have to buy tokens to get my bins emptied.


Do you seriously think they actually make money by charging you 3 quid a bag and collect it at your doorstep ? Try doing it yourself and bring the rubbish to the dump once a week. Cost of time, travel and dumping would be a lot more.


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## T McGibney (24 Jun 2011)

elcato said:


> Do you seriously think they actually make money by charging you 3 quid a bag and collect it at your doorstep ? Try doing it yourself and bring the rubbish to the dump once a week. Cost of time, travel and dumping would be a lot more.



All waste collection services in my neck of the woods are done by competing private contractors. As far as I'm aware, these services are not subsidised by the State.


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## RMCF (27 Jun 2011)

elcato said:


> Do you seriously think they actually make money by charging you 3 quid a bag and collect it at your doorstep ? Try doing it yourself and bring the rubbish to the dump once a week. Cost of time, travel and dumping would be a lot more.



As McGibney above me said, my waste is collected by a private company, *not* the local council.

Does your local council collect your waste?


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## elcato (27 Jun 2011)

I have them collected by the council alright. Point taken if you are paying privately but unfortunately councils need money to be run. Granted, probably quite badly, but believe it or not they actually do provide a litter service on the street and do some general road repairs, maintenance etc.


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## och aye (28 Jun 2011)

if a couple have two houses.
Each run as a holiday guest house
Business, insurance, secuity  etc demand one spouse live in each house
Is NPPR chargeable on either of these houses ?


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## mandelbrot (28 Jun 2011)

och aye said:


> if a couple have two houses.
> Each run as a holiday guest house
> Business, insurance, secuity  etc demand one spouse live in each house
> Is NPPR chargeable on either of these houses ?



Yes. Take your pick and pay it.


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## beffers (1 Jul 2011)

Article in the Indo about the NPPR tax. 
http://www.independent.ie/business/...o200-council-charge-or-face-fine-2807028.html

I thought that this part was interesting.



> Anyone who fails to pay faces court proceedings, while the onus is on  the owners to establish whether they are liable for the tax.


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