# Want to sell investment property - I have paid no taxes in 11 years



## Redwood1964 (6 Jul 2015)

Hi there

Would anyone hazard a guess as to what I owe if I haven't paid any of the costs, including Rental Income Tax, PRTB, NPPR, USC, etc... for the past 11 years?!

I have been unwell for most of that time but that's beside the point as I couldn't afford to pay and thought that these could all be paid back upon sale of the property.

I started out with a €200,000 mortgage which has now reduced to €126,000.
I've had 5 sets of tenants during this time with the rent just about covering the mortgage repayments.

Now I've discovered that the likes of the PRTB, NPPR and USC need to be paid before the property is sold.

I cannot pay them as I'm only on a welfare payment for the past 10 years.

The apartment is now worth close to €400,000 and has two good tenants in situ willing to stay for another year.

All costs of keeping the property in good condition have been loans from my family which I will pay them back on completion of sale.

Can somebody do the sums because I am floundering with all the penalty charges, etc...

Thank you in advance


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## vandriver (6 Jul 2015)

Over 7k in NPPR anyway.
Did you disclose to welfare that you had an apartment generating income?


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## Redwood1964 (6 Jul 2015)

vandriver said:


> Over 7k in NPPR anyway.
> Did you disclose to welfare that you had an apartment generating income?





vandriver said:


> Over 7k in NPPR anyway.
> Did you disclose to welfare that you had an apartment generating income?



I did and was told the benefit I am on is non means tested.
Is NPPR the heaviest of the hitters?


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## Brendan Burgess (6 Jul 2015)

Redwood1964 said:


> I started out with a €200,000 mortgage which has now reduced to €126,000...
> 
> I cannot pay them as I'm only on a welfare payment for the past 10 years.
> 
> ...



Of course you can pay your taxes. You have equity of €270k which should be enough to pay the taxes, interest and penalties. 

You need to engage an accountant immediately to sort this out with the Revenue.

You have been repaying capital on your mortgage instead of paying taxes. You will get little sympathy from Revenue. 

Brendan


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## Redwood1964 (6 Jul 2015)

Brendan Burgess said:


> Of course you can pay your taxes. You have equity of €270k which should be enough to pay the taxes, interest and penalties.
> 
> You need to engage an accountant immediately to sort this out with the Revenue.
> 
> ...


I certainly hope it won't eat up the equity to that extent! Thanks Brendan.
I could only afford to pay the capital on the mortgage. The rest was for the never never.

Can you recommend a good accountant?


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## Gordon Gekko (7 Jul 2015)

At a guess, €60,000 in total. That's back of the envelope stuff.


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## jim (7 Jul 2015)

Gordon Gekko said:


> At a guess, €60,000 in total. That's back of the envelope stuff.



How did you calculate that? Whether back of envelope or front.


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## Gordon Gekko (8 Jul 2015)

jim said:


> How did you calculate that? Whether back of envelope or front.



Assumed that the apartment was similar to my own and worked off those figures. 

For example:

- Costs enough to eliminate 20% of the rental income.
- In the context of the above, the fact that for a long time non payment of the NPPR charge means no deduction for mortgage interest.
- Tax of 50% of the balance (so effectively tax equal to 40% of the rental income based on a 50% taxpayer). The fact that the OP is on social welfare may bring the tax rate down to (say) 30% which would obviously reduce the headline number.
- 8% interest per annum imposed by Revenue (non negotiable).
- A mitigated penalty based on the making of a Qualifying Disclosure.


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## moneybox (8 Jul 2015)

OP -  you had a rental income while drawing a social welfare payment, did you declare this income to social welfare if not they too may come looking for pay back.  It's hard to feel sorry for you, you had a responsibility to pay your taxes along with everyone else. Paying nothing for 11 years is totally unacceptable.


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## venice (8 Jul 2015)

moneybox said:


> did you declare this income to social welfare if not they too may come looking for pay back.



Op has already stated the benefit was not means tested.



moneybox said:


> It's hard to feel sorry for you



To be fair I really don't get the impression the OP is looking for your pity, 



moneybox said:


> you had a responsibility to pay your taxes along with everyone else. Paying nothing for 11 years is totally unacceptable.



or a lecture.


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## Brendan Burgess (8 Jul 2015)

venice said:


> To be fair I really don't get the impression the OP is looking for your pity,
> 
> or a lecture.



Hi venice

If someone comes along saying that they have paid no tax for 11 years, I think that a poster is quite right to say that it is unacceptable. 

Brendan


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## Redwood1964 (8 Jul 2015)

Brendan Burgess said:


> Hi venice
> 
> If someone comes along saying that they have paid no tax for 11 years, I think that a poster is quite right to say that it is unacceptable.
> 
> Brendan


Time for me to try and defend myself.

Firstly, it was always on my mind to pay back what I owed, whatever interest and penalties incurred.
I didn't think that I was liable in the earlier years for rental income tax as I had no income from the rent. Just about breaking even.
PRTB I never heard about, NPPR the same until the past couple of years. They were to go in the pot to be paid when I sold the property.

I could not afford to pay for them otherwise. This is probably my greatest weakness - I couldn't afford to be a landlord.

I was not in the company of other landlords, I never learnt through conversation about the extent of the tax exposure but I was a good landlord. I looked after my tenants and in turn they took care of the property and stayed long periods.

Secondly, I mentioned in my first post that I was not well for this period. I have been mercilessly unwell. That's all you need to know about that. It is something that is cumulatively excruciating and takes up my life and I will die from it. I don't want your pity for this but I do want you to see that all is not as it seems.

The apartment was something I bought and could buy when I was a working man. I fell in love with it. I keep pictures of it on my bedroom wall.

I'd hate to sell it but it looks very much like I'll have to because it has just come to my attention that all this tax needs to be taken care of before the sale. I'll have no problem selling it myself because, as I say, I love it and know it better than any real estate agent.

I write this out of frustration and out of respect for Askaboutmoney and Brendan Burgess.

Thank you for your help


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## Joe_90 (8 Jul 2015)

Ok so start at the beginning.

1. Did you claim tax relief at Source on mortgage interest?
2. Did you claim an exemption from Stamp Duty?
3. Income tax:  you need to summarise your rental income per calandar year.
Get the mortgage statements and summarise the mortgage interest for each calendar year.  75% of the interest is allowable if the tenancy is registered with the PRTB. ( you can retrospectively register the tenancies)
Summarise all relevant expenses per calandar year.
4. Get a summary of your social welfare benefit.
5. The NPPR is due €7k.

Take all this info to an accountant and they will summarise the income and compute the tax.


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## Agent 47 (8 Jul 2015)

Hi Redwood, as a resource AAM is a good resource full of the knowledgeable and the less knowledgeable characters, each post confusing or enlightening, therefore it is a research database. You need solutions now that you are enlightened and that necessitates finding a good accountant knowledgeable in revenue and property related matters. A few posters on this website have website addresses and au fait in such matters, look them up, give them a call, meet them and get this problem sorted with the relevant parties and move on. Life can be short enough and bills are irrelevant when that time comes.
As a landlord I saw your post on that other website, solutions are with a good accountant now you are enlightened in terms of approx costs.


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## Redwood1964 (9 Jul 2015)

Agent 47 said:


> Hi Redwood, as a resource AAM is a good resource full of the knowledgeable and the less knowledgeable characters, each post confusing or enlightening, therefore it is a research database. You need solutions now that you are enlightened and that necessitates finding a good accountant knowledgeable in revenue and property related matters. A few posters on this website have website addresses and au fait in such matters, look them up, give them a call, meet them and get this problem sorted with the relevant parties and move on. Life can be short enough and bills are irrelevant when that time comes.
> As a landlord I saw your post on that other website, solutions are with a good accountant now you are enlightened in terms of approx costs.


Thanks very much for your help. How do I find the posters with website addresses?


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## Steven Barrett (9 Jul 2015)

Where are you based Redwood? 

No point in recommending an accountant on the other side of the country


Steven
www.bluewaterfp.ie
(I am not an accountant )


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## Redwood1964 (9 Jul 2015)

Dublin South Steven


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## kceire (15 Jul 2015)

My point of contact is Damien in 

He looks after my landlord responsibilities and covers Dublin and surrounding counties i believe.


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## ixus (26 Jul 2015)

CGT will be big on this. Do you currently own the property you reside in? Could you sell that and move into apartment as primary home to eliminate CGT?


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## Joe_90 (26 Jul 2015)

ixus said:


> CGT will be big on this. Do you currently own the property you reside in? Could you sell that and move into apartment as primary home to eliminate CGT?



How would this eliminate the CGT?


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## mtk (26 Jul 2015)

"let he who is free from sin cast the first stone"

'nuff said


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## ixus (27 Jul 2015)

Joe_90 said:


> How would this eliminate the CGT?


Pay no cgt on sale of home (assuming pos equity).  
Pay taxes owed from renting apartment.

Move into apartment.


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## Jon Snow (28 Jul 2015)

kceire said:


> My point of contact is Damien in
> 
> He looks after my landlord responsibilities and covers Dublin and surrounding counties i believe.



Hmmmmmmmm...

No detail on the site about who the proprietor of the firm is, where their office (if any) is, or what professional qualifications (if any) they have - which usually means none, because any qualified accountant or tax consultant will advertise their hard earned quals.

Being a "Registered Tax Agent" with Revenue literally means nothing; anyone who wants can get a TAIN.

I'm sure they probably compete on price, and may provide a great and simple service for run of the mill stuff, but I doubt negotiating substantial back duty settlements with Revenue is the guy's forté...


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## Bronte (28 Jul 2015)

Redwood1964 said:


> Thanks very much for your help. How do I find the posters with website addresses?


 
Redwood poster Joe 90  is an accountant I believe and he's already told you how to start getting your affairs in order starting with the PRTB.  Very importanta this as it means the mortgage interest will be allowable then.  Though it's unclear from your posts if you have actually paid interest.    The accountant you hire does not have to be in the same location as yourself (I live abroad and my accountant is in Ireland and we meet once a year as everything can be done via email once it's is up and running - don't forget this cost is tax deductable). 

Can you do as Joe 90 says and give us figures for each of the last 11 years.   There is no way around the NPPR.  But with a good accountant there may be some lee-way with revenue particularly as you have been ill. 

It seems you don't want to sell the property and this might be possible if the figures make sense.  Though if you're as ill as you say, selling might be the best option.


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## Redwood1964 (28 Jul 2015)

Thanks Bronte and all.

I have signed present tenants up to PRTB.

Made application for mortgage interest certificates from my mortgage provider. Should be here in a week.

Spent 2 hours in bank printing out bank statements. Only go back to December 2009. Need to pay €3 a sheet from head office for rest going back to 2004.

Requested statements of insurance paid each year.

Requested hospital admissions and discharges on headed paper going back 20 years.

Think I started renting property at €1,000/month. Went up in equal increments to present total of €1,450/month. Each tenancy lasted at least 2 years with exception of a one year duration.

I'd love to keep the apartment but how can I? It is getting harder for me to handle changeovers anyway. Would Revenue wait for me to see out the term of the mortgage?! I doubt it. I think I've to pay up front for these taxes but that may be wrong also. Anyway I'll have to come to some arrangement with them.

Yes, the CGT is going to be a whopper but please note that the €200,000 mortgage wasn't the whole story. I paid €254,000 for the apt in total. The€54,000 came out of a €70,000 inheritance. Spent rest of inheritance on furnishing and fittings.

I live in a house owned by my brother-in-law. He kindly 'donated' it to me to act as caretaker when things were particularly bad. It is rent free but I do not own it. Wish I did! I am very lucky to have it.

Joe 90 asked:

1. Did you claim tax relief at Source on mortgage interest?
No
2. Did you claim an exemption from Stamp Duty?
No
3. Income tax: you need to summarise your rental income per calendar year.
Just breaking even with mortgage until 3 years ago when I charged €1,300/month. Now €1,450 with mortgage repayment €1,050.

Get the mortgage statements and summarise the mortgage interest for each calendar year. 75% of the interest is allowable if the tenancy is registered with the PRTB. ( you can retrospectively register the tenancies)
Summarise all relevant expenses per calendar year.
Doing this.

4. Get a summary of your social welfare benefit.
Will do this.

5. The NPPR is due €7k.


One more thing, I was a few months in arrears about 5 years ago and mortgage provider rejigged the mortgage repayments. I can't remember what effect this had on my mortgage term but I'll find out this as well. This may be important but paying €1,050/month ever since.

The value of €400,000 that I have on property is not copper fastened either. It's more my judgement as to what it's worth but it's in a great location and is a special place. Other 2 bed apartments in area have sold recently for €350,000 but nothing special. This place is.

Going about trying to sort this out has been good. Thanks for your help.


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## Bronte (28 Jul 2015)

Revenue don't know about you yet so it's not a question of them finding you until you come to them.  Best to have everything in order and you're going about this correctly.  You also have to register your previous tenancies with the PRTB, and this can be done.  I would advise you to pay for the bank statements.  I sincerly advise you to hire an accountant, there is no way you'll manage this on your own, but getting all the paperwork is a necessary first step.

Don't forget all the deductables on rental income.  Wear and tear, life insurance, house insurance, lawn cutting, repairs, advertising, lease costs etc. 

Is the apartment in Dublin - as 400K sounds a lot for a two bed to me.


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## Redwood1964 (28 Jul 2015)

Apt on a leafy old Georgian square with period features and high ceilings. Bright and airy throughout. See, I love it! Yes in South Dublin City. Character and location. Walk everywhere. Have I sold it?!


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## Bronte (28 Jul 2015)

Yes you've sold it, I get it.


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## Redwood1964 (2 Aug 2015)

Hi Bronte

I've done up a collage of the apt to convince you and the Revenue further!

How can I get it to you?

Cheers,
Redwood


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## Branz (2 Aug 2015)

Just reading this, I don't see any mention of LPT or its predecessor the Household charge which I believe hit serious numbers if unpaid.

Is it an issue for investment properties or did it only target home owners?

OP are you the owner of where you are living now because there maybe LPT, house charge issues there

OP: you need to be 1000% certain that your SW benefit was not means tested or did'nt change to be means tested during the 11 years.


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## Redwood1964 (2 Aug 2015)

Hi ircoha

What does LPT stand for do you mind? Local Property Tax?

I don't own where I am living but brother-in-law does and very kindly doesn't charge me anything for the privilege.

Illness benefit not means tested. Based on stamps accrued during employment.
They are very jumpy if there is even a hint of you starting a job which is only fair.

How much per year is the USC do you know?


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## Branz (2 Aug 2015)

USC
http://www.revenue.ie/en/tax/usc/index.html

Not on SW payments


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## Bronte (3 Aug 2015)

ircoha said:


> Just reading this, I don't see any mention of LPT or its predecessor the Household charge which I believe hit serious numbers if unpaid.
> 
> Is it an issue for investment properties or did it only target home owners?
> 
> .


 
He does not live in the property and is therefore liable for both the LPT (local property tax - which is relatively new, about two years)  and the household charge (Can't remember but that was around 100 Euro and it only lasted a year or so before being abolished) .  Any fines on this are nothing like the ones associated with the NPPR (lasted quite a few years, maybe five)


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## Bronte (3 Aug 2015)

Redwood1964 said:


> I've done up a collage of the apt to convince you and the Revenue further!


 
What's a collage?


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## Branz (3 Aug 2015)

Bronte said:


> He does not live in the property and is therefore liable for both the LPT (local property tax - which is relatively new, about two years)  and the household charge (Can't remember but that was around 100 Euro and it only lasted a year or so before being abolished) .  Any fines on this are nothing like the ones associated with the NPPR (lasted quite a few years, maybe five)



Yes my mistake


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## Bronte (3 Aug 2015)

ircoha said:


> Yes my mistake


 

It's hard to keep up with all the charges especially as the years go by.

https://www.nppr.ie/default.aspx

_The annual NPPR charge of €200 per property applies for all years 2009-2013_

_This bit is interesting:_

_A person who does not pay a NPPR charge by the payment date leaves themselves open to prosecution by the Local Authority to whom the payment is due. A late payment fee will also arise if payment is not made by the payment date - see above. Furthermore, both the NPPR charge and any accumulated late payment fee will be a charge against the property concerned and will continue to be such for twelve years after the charge or late payment fees concerned became due. Any NPPR charges or late payment fees due on a residential property will have to be discharged, in full, before a transfer or sale of the property can be completed.
The table below outlines the NPPR charge and the corresponding late payment fees for each year at monthly intervals._

Could the OP wait 12 years and get away with it I wonder.


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## kceire (9 Aug 2015)

Jon Snow said:


> Hmmmmmmmm...
> 
> No detail on the site about who the proprietor of the firm is, where their office (if any) is, or what professional qualifications (if any) they have - which usually means none, because any qualified accountant or tax consultant will advertise their hard earned quals.
> 
> ...



Damien is the owner of the firm.
Office is in Glasnevin.
Can't answer exactly what quals he has but he has the normal "bunch of letters" after his name, and has been doing my returns since he was a manager in Cornmarket Financial Services in Dublin.

My business cards also do not list my quals on it but I suppose that's a personal choice, People could easily add in the BEng, MIEI or AIFireE if it made people felt better

Anyway, it was a simple recommendation, don't like him, don't use him, use someone else.


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## Jon Snow (10 Aug 2015)

kceire said:


> Damien is the owner of the firm.
> Office is in Glasnevin.
> Can't answer exactly what quals he has but he has the normal "bunch of letters" after his name, and has been doing my returns since he was a manager in Cornmarket Financial Services in Dublin.
> 
> ...



Look at the website of any normal reputable accountancy or professional services firm - the name(s) of the principal/partners are always prominent, especially in the About Us part of their site; why? Because they trade on the professional expertise and reputation of those individuals.

The fact that you say he was previously a manager in Cornmarket probably confirms that he isn't a qualified accountant with a practice cert from one of the main accounting institutes.

I don't list all my letters after my name either, but if I was still in practice and had a website, I definitely would, there if nowhere else.

The guy may be very good at the basics, but I reiterate this is not the normal run of the mill tax return, the OP needs someone whose bread & butter is making settlements with Revenue .


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