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



## Moggy (9 Nov 2007)

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 (9 Nov 2007)

*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 (9 Nov 2007)

*Re: Should I register?*



sam h said:


> 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.




sam h said:


> 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 (9 Nov 2007)

*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 (9 Nov 2007)

*Re: Should I register?*



sam h said:


> 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 (9 Nov 2007)

*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 (9 Nov 2007)

*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 (9 Nov 2007)

*Re: Should I register?*



ubiquitous said:


> 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 (9 Nov 2007)

*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 (9 Nov 2007)

*Re: Should I register?*



Moggy said:


> 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 (9 Nov 2007)

*Re: Should I register?*



Moggy said:


> 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 (9 Nov 2007)

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



Moggy said:


> 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 (9 Nov 2007)

*Re: Should I register?*



Moggy said:


> 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 (9 Nov 2007)

*Re: Should I register?*



qwertyuiop said:


> 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.



			
				ajapale said:
			
		

> 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.



			
				asdfg said:
			
		

> 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 (9 Nov 2007)

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



			
				From PRTB.ie said:
			
		

> *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.
> 
> 
> ...



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 (9 Nov 2007)

*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 (9 Nov 2007)

*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 (10 Nov 2007)

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



Moggy said:


> 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 (10 Nov 2007)

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



Moggy said:


> 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 (10 Nov 2007)

*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.


----------



## Moggy (10 Nov 2007)

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



ajapale said:


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



ajapale please I'm just here for some sound advice.  This is a serious situation I'm in so if you've no advice to give I'd appreciate if you'd stay out of the discussion.



			
				webtax said:
			
		

> I'm not sure what "leeway" you are concluding is available re the prtb - you have one month to register.


By leeway I mean we will not have to pay CGT if we sell within a year or so (based on the calculation given) and also if I were not to register and get caught we will have 2 weeks to sort it out and will not face an automatic €3,000 fine and/or 6 months in prison as is suggested here.



> it seems that you think that you can wait til the prtb find you and then register within 14 days


 Yes this is what I think.  I also think all these measures by the PRTB are designed to catach property investors who are evading tax.  I don't beleive they are designed to catch out a newly married couple who are forced to rent as an alternative to handing the keys over to the bank.  I think once the letter comes and we explain the situation in writing we will just have to register within 2 weeks (and pay back the TRS and everything that comes with registering) and that will be that.



> 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.


 Yes I'm aware of the stamp duty situation.  Renting aside, the fact we are selling before the 5 year time frame is up means we must pay the stamp duty.


----------



## sam h (10 Nov 2007)

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

Moggy, you are missing a key element. Say you get €12k in rent in the year and pay €10k in interest but you haven't registered. It is not simply a matter of paying the €140 late fee and all is fine. You will then be liable for tax on the full €12k rather than on €2k. That could cost you about €5k in income tax. There have been other posters on AAM who have been caught with this & the Mr Taxman does not really care that you are abit strapped for cash. All he sees it you have made an income, you are liable for tax.


----------



## Moggy (10 Nov 2007)

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



sam h said:


> You will then be liable for tax on the full €12k rather than on €2k.


OK well thats definitely something to consider.


----------



## ajapale (10 Nov 2007)

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



Moggy said:


> ajapale please I'm just here for some sound advice.  This is a serious situation I'm in so if you've no advice to give I'd appreciate if you'd stay out of the discussion.



Moggy, 

Im sorry that you did not find my contributions either sound or helpfull. Are you confusing me with some other poster/moderator?

Ive changed the title to reflect your question more accurately. Let me know if  this is ok.

Finally, if I were in your situation I would be seeking independant advice from the appropriate professionals (accountant/tax advisor/solicitor etc)

aj
(moderator)


----------



## Trustmeh (10 Nov 2007)

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



Moggy said:


> Yes I'm aware of the stamp duty situation.  Renting aside, the fact we are selling before the 5 year time frame is up means we must pay the stamp duty.




I dont think you are understanding me. You dont owe stamp duty on any house that you sell - only on houses you buy. You paid stamp on your ppr apartment when you bought it originally. The stamp duty rate you would have paid was probably non-investor ie; possibly zero.  But if you rent out before the 5 years you will owe the difference between what you paid and the investor duty that would have been charged at the 
time. Use the search function on this site, its easy.

http://www.askaboutmoney.com/showthread.php?t=42159

I really think you need to go into a tax adviser quick because you seem unable to take on board the advice here and/or understand it fully.


----------



## z106 (10 Nov 2007)

*Re: Should I register?*



Moggy said:


> 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.


 
From what i can gather,what you are actually saying is that due to your current financial situation you can't really afford to sell the property for less than what you are currently asking for it.

As a result of this sticky financial situation you find yourself in,you are hoping the tax man will make allowances for you.

Well that is a long shot.

Like - it's hardly the tax mans fault that your finances aren't in order?

You can hardly expect the tax man to go around to everyone to find out if they can currently afford their tax bill - and then simply leave them off paying the bill if they find they cannot pay it because they have spent that money on other stuff.

Or is my understanding incorrect?
Apologies if it is - but that seems to be the crux of it going by what I've read.


----------



## Persius (10 Nov 2007)

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



Moggy said:


> ...Yes I'm aware of the stamp duty situation. Renting aside, the fact we are selling before the 5 year time frame is up means we must pay the stamp duty.


 
Incorrect. If you keep the property for less than 5 years but it is your PPR for the entire time, and never rent it out, there will be no stamp duty clawback.


----------



## Trustmeh (10 Nov 2007)

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



Persius said:


> Incorrect. If you keep the property for less than 5 years but it is your PPR for the entire time, and never rent it out, there will be no stamp duty clawback.



I think muggy thinks the stamp duty he has paid on his new house is what we are talking about. wait untill he figures out he could get caught for having to pay stamp duty twice in this situation! once for buying new ppr and once for clawback on renting out the apartment.


----------



## Moggy (10 Nov 2007)

yankinlk said:
			
		

> Use the search function on this site, its easy.


I'm aware of the stamp duty situation and am not seeking advice on it right now, but thanks all the same.  I'll use the search function to find out more info on it, but right now I'm looking into the PRTB.



			
				qwertyuiop said:
			
		

> As a result of this sticky financial situation you find yourself in,you are hoping the tax man will make allowances for you.


LOL.  As a self employed professional I am fully aware of how the tax man operates and I'm not expecting any special allowances.  I'm expecting some leeway (clearly the wrong choice of words as some people are getting rubbed up the wrong way about it, but I'll stick to it at this stage) and based on some peoples advice there is leeway regarding CGT.  All things going to plan we won't have to pay any, whether we're registed or unregistered.  

CGT was my main concern.  I was under the impression once we are registered as landlords we would be fleeced by CGT when selling and as far as I was concerned it meant sticking to the landlord business long term, something I have no desire to do nor the knowlege/skills to do it effectively.  As this is not true I should have nothing to worry about.

At this stage I think you are right I need to talk to a professional.  I always like to have a certain amount of knowledge so that I can better understand the advice and be able to ask questions.  As you can all tell I'm clueless, hence me asking here before hand.

I have taken on board everyones advice (those with advice), sorry if I've given the impression that I am not taking your points on board.  I'm just trying to bash this out and understand it.


----------



## Moggy (10 Nov 2007)

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



Persius said:


> Incorrect. If you keep the property for less than 5 years but it is your PPR for the entire time, and never rent it out, there will be no stamp duty clawback.



I am already aware of this. 



			
				yankinlk said:
			
		

> I think muggy thinks the stamp duty he has paid on his new house is what we are talking about.


I am already aware of the stamp duty situation. Will I say it again? I am already aware of the stamp duty situation. One more time? I am already aware of the stamp duty situation.




			
				yankinlk said:
			
		

> wait untill he figures out he could get caught for having to pay stamp duty twice in this situation! once for buying new ppr and once for clawback on renting out the apartment.


Only if I register

Thanks for all the advice.  Over and out.


----------



## Trustmeh (10 Nov 2007)

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



Moggy said:


> Only if I register
> 
> Thanks for all the advice.  Over and out.




Yes, best if you did move on. If you think that you're only risk to being caught for avoiding stamp duty clawback or any other tax is wether you register with prtb or not - then good luck too you. and by that i mean bad luck. and i do hope revenue go looking for people with this attitude. isnt that what they got those big new fancy supercomputers for? they have to earn their keep after all.

(this is a good thread spin off - if/when revenue does crack down - it should help to get things moving in the housing market. im sure many people are avoiding lowering their asking prices by renting out houses "illegally" and avoiding prtb/clawback/trs/rental income tax/etc... anyone out there want to run a simple program that cross checks propertypin's houses for sale listings with dafts houses for rent? it should net a good percentage of tax dodgers)


----------



## sam h (10 Nov 2007)

> CGT was my main concern. I was under the impression once we are registered as landlords we would be fleeced by CGT when selling


 
The CGT will only kick in from when your OH stopped using it as her PPR (AFAIK). You should have got a formal valuation, should still be able to if not too long ago. As property prices have come down in the last while, you may actually have a CGT Loss which you can carry orward to use against future Cap Gains.


----------



## webtax (10 Nov 2007)

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



ubiquitous said:


> 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 said:


> 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.





Moggy said:


> Only if I register




looks like you were trying to evade after all. in case you're tempted you should remember:
1) your tenants have 4 years to claim rent relief
2) prtb and revenue have started sharing their records 
3) the revenue will have you & your wife on record as having two properties. do you not think they'll wonder what you're doing with the non-PPR and how you're funding the mortgage?


----------



## Butter (10 Nov 2007)

As people tend to find out when they have the idea of renting out a property there is actually a hell of a lot of information that they need to get to figure out if it worthwhile or not.  
It's not anybody's fault when they point out the legal and tax obligations associted with being a landlord even if the information is not what the OP wanted to hear.
If the OP has already got an accountant to deal with their books as he is self-employed, maybe the accountant is the person to talk to about all of this.  It's not just as simple as hoping you don't get caught and if you do then paying up after you get caught.  The taxman is fond of interest and penalties and that can substantially increase the costs.
If it was me I would sell the property even if I could only get a break-even price, then there's no worries about paying back stamp duty or CGT.  
If I couldn't do that I'd change the mortgage to interest only, register the property with the PTRB and declare the rent on the self-assessment.  From experience though, even when a property has a low ltv it's still hard to actually make a profit from renting it out and there are a lot of hassles associated with being a landlord especially if it is not something you actually want to do.
In the future I can well see a huge campaign by the revenue to get all the money owed by undeclared landlords (both stamp duty clawback and unpaid tax).


----------



## Moggy (10 Nov 2007)

Marg said:


> As people tend to find out when they have the idea of renting out a property there is actually a hell of a lot of information that they need to get to figure out if it worthwhile or not.


Thank you, at last someone who understands what I am trying to do here.


----------



## KBR (10 Nov 2007)

Moggy,

At this stage you might as well go and check out how much tax you would have to pay - it's really not that much & by the sounds of your post you would have a very large interest write off.  Registering also is only €70 per tenancy & is tax deductable.  You're probably bringing in about €12k income a year & the tax is bound to be less than €1k on this if you avail of all the write-offs available.


----------



## ajapale (10 Nov 2007)

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



ajapale said:


> It is a requirement on         all landlords to register details of their tenancies within one month of         their commencement.



It appears you have one month from the *commencement* of the tenancy. How long have your tenants been in place?


----------



## Brendan Burgess (11 Nov 2007)

This thread has become repetitive. I have deleted most of the posts which added nothing. 

Brendan
Administrator.


----------

