Estate agent advising not to sell?

[whizzbang]

There are innumerable possibilities including the ones above. Don't forget that Revenue are getting better at profiling taxpayers and singling out some for audits where there may be circumstantial evidence of evasion. Hopefully they catch up with more spongers sooner rather than later and stop them ripping the rest of us off.

true, I'll mention it to my friend next tiem I see him. I take it it would be better for him to do it before selling than after right?

 

[SarahMc]

Or maybe the renters could rat him out to the PRBT? I think he gives them a good rent rate so they will not claim the tax relief.

The tenants are mad not to be claiming tax relief. Has he made a deal with them that the rent is lower if they don't claim? If so, all it needs is for them to feel agrieved over something and he is screwed.

 

[whizzbang]

The tenants are mad not to be claiming tax relief. Has he made a deal with them that the rent is lower if they don't claim? If so, all it needs is for them to feel agrieved over something and he is screwed.

I think he has made a deal with them and they are paying under the going rate. He also tends to have foreign nurses and students in the place so chances are they don't really know about rent relief and stuch. They are probably just happy to be getting cheap rent.

In reality I think there are a lot of people doing this and if the revenue started cracking down on it you might see a lot more houses on the market as people start to factor in the higher cost of being an "Official investor".

 

[ClubMan]

In reality I think there are a lot of people doing this and if the revenue started cracking down on it you might see a lot more houses on the market as people start to factor in the higher cost of being an "Official investor".

Not necessarily. By being a tax evader your friend is missing out on significant tax breaks such as the ability to offset 100% of mortgage interest and other allowable costs against rental income. He is also potentially losing out by discounting the rent below market rates in an attempt to cover his tracks. He may actually be better off in the long run as a tax compliant investor rather than a tax evader even after the other tax liabilities are taken into account. Even apart from the risks of being found out and having to pay outstanding liabilities, interest and penalties and perhaps worse.

But otherwise bring it on...

 

[whizzbang]

Not necessarily. By being a tax evader your friend is missing out on significant tax breaks such as the ability to offset 100% of mortgage interest and other allowable costs against rental income.

hmm, does this mean if you had an interest only mortgage you could get 100% tax relief on it?

 

[hmmm]

The tenants are mad not to be claiming tax relief. Has he made a deal with them that the rent is lower if they don't claim? If so, all it needs is for them to feel agrieved over something and he is screwed.

If I was in their position I would take the so called "deal" and then once I left the property claimed the tax relief for the years in question. I'm sure they will more than likely do similar, if the landlord wants to try and evade tax that's not their problem.

I probably should observe that the foreigners I work alongside tend to watch every cent and euro much more than the Irish workers (because most of their income is sent home and means a lot more to them). I wouldn't assume that foreigners would know less than Irish people about tax relief.

 

[whizzbang]

If I was in their position I would take the so called "deal" and then once I left the property claimed the tax relief for the years in question. I'm sure they will more than likely do similar, if the landlord wants to try and evade tax that's not their problem.

I probably should observe that the foreigners I work alongside tend to watch every cent and euro much more than the Irish workers (because most of their income is sent home and means a lot more to them). I wouldn't assume that foreigners would know less than Irish people about tax relief.

good point, my mate is very laid back, hopefully he doesn't get screwed by this!

 

[Smi1er]

if he admits it to the Revenue) how likely is he to get caught do you think? so far as I am aware the Revenue think he is living there on his own.

How stupid! Where money is concerned there are two quite major lessons.

1/ Don't screw the Taxman
2/ Don't screw the VAT Man

It quite simply isn't worth it. Last person I knew that screwed the VAT man thought he was been smart. Until they collared him. He owed the VAT man £170K. 4.5 years he got along with a £170K fine.

 

[ClubMan]

hmm, does this mean if you had an interest only mortgage you could get 100% tax relief on it?

It means that an investor using an interest only loan to purchase/renovate an investment property can offset 100% of mortgage interest against rental income.

Interest only mortgage

good point, my mate is very laid back, hopefully he doesn't get screwed by this!

If by "getting screwed" you mean paying his fair share of the sort of tax liabilities that we all face then I hope he is!

 

[whizzbang]

If by "getting screwed" you mean paying his fair share of the sort of tax liabilities that we all face then I hope he is!

good point, well made.

I plan on asking him when I'm going to get my cut of the stamp duty. 1/4,000,000th of it is mine after all!