How does the Gov. know if you are an owner occupier?

  • Thread starter tolkarovers
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tolkarovers

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Hi,
I'm planning on buying a property with my girlfriend in the coming weeks and I'm curious about one issue.
We plan to go travelling next year and would have to rent out the property to cover the mortgage. This would mean that we should pay the stamp duty (that we were exempt from when we purchased). How does the Gov. know if you are an owner occupier? Is there anyway around this issue?
Thanks in advance
 
they have ways and means!!!

hi Tolkarovers,

well for starters, your tenants are entitled to tax relief, which means that they need your PPS number, so you will need to declare the revenue.....
 
Re: they have ways and means!!!

tolka,

I think you should take advice on this.

I would presume that the Revenue accept that you have a PPR even when you're travelling.

Thus, is it not possible to characterise the relationship between you and the people staying in your house when you're not there as being something other than landlord and tenant in the absolute sense?

Could you not rent them a room (in which case both parties would be entitled to tax relief) and tolerate their use of the rest of the property in your absence?

I'm not trying to facilitate tax evasion here. I'm guessing that the Revenue would continue to treat you as domiciled in Ireland while travelling abroad (for the purpose of treating investment income, for example) in which case it seems unfair that you lose the "benefit" of a PPR in the state.
 
Re: they have ways and means!!!

You're not legally required to give tenants your PPS so I don't think that would be an issue. I'm not trying to hood wink the government here - but we're on ok money and we've been saving hard for more then a year and we just cannot afford to pay stamp duty :)
 
There are a lot of people in the same boat

I am sure there are a lot of people who "cannot afford to pay stamp duty", but they still have to do it.

If you aren't trying to hoodwink the goverment, why don't you just contact them and ask about your position and where you stand regarding the stamp duty liability
 
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Also strongly recommend you check out your obligation to register with the PRTB as a landlord.

Where you got the notion that you don't have to provide your PPS I really don't know (in fact your TENANT is legally required to surrended all info about YOU if requested).

I also support MichaelLs stance, if you're not trying to evade tax (stamp, income or cgt) they give them a call and explain the situation.

There MAY be potential in the rent-a-room idea depending on how they view your domicile during this time and keeping the income behold the threshold.
 
Re: -

Could you afford to leave it vacant ? It might work out cheaper than paying the stamp duty.

Also, if you get a direct family member to live in your house, then I believe it is not classed as an investment property. You could then avail of the Rent a Room scheme.
 
Re: -

I could get a direct family member to live in the house!!
Thanks a million NoelC
 
Re: -

You can avail of the rent a room sceme so long as the income is under (I think) €7600. HAving a relative stay in the house makes no difference. What are you going to do when the tennant asks for your PPS number to claim his/her tax relief?
 
Re: -

The tenant DOES NOT need to get your PPS number from you - all they have to do is give the revenue your name and the address, and the Revenue will be able to find out the rest. And, if they deem you to have been messing with them, come down on you like a tonne of bricks.

Also, if you're a non-resident landlord the tenant is obliged to withold 20% of the rent and pay it to the revenue on your behalf, which would of course send off triggers for the Revenue.
 
Re: -

HAving a relative stay in the house makes no difference
Click to expand...

Untrue.

The Revenue would regard a brother or sister staying in the house (and not paying you rent) as equivalent to you being in residence your self.

Your bro / sis could then get someone else in under the Rent a Room scheme.

You could ring the Revenue helpline for more details, or check the website (www.revenue.ie)
 
Renting out your PPR whilst abroad

I had to find out all about this when I inherited my late mother's house in Ireland (I live in UK).

Leaving it empty is a security risk and the insurance is very high.

The information I got from Revenue was that a family member other than myself in occupancy was "a tenancy" if I was not in residence myself, and criteria which apply to an ordinary rental apply here.

My information was the Rent A Room scheme applies only if the owner is resident and the arrangement cannot be applied if the owner is non-resident/abroad.

If/when you are abroad and let out your PPR you MUST (it is not optional) appoint an agent to collect rent on your behalf (i.e. it cannot simply be debited into your account/mortgage in Ireland).

If someone other than yourself is in occupancy of the property that property MUST (not optional) be registered as a rental property.

Hope this is helpful.
 
Re: Renting out your PPR whilst abroad

The information I got from Revenue was that a family member other than myself in occupancy was "a tenancy" if I was not in residence myself, and criteria which apply to an ordinary rental apply here.
Click to expand...

Having gone through something similar myself, this is the diametric opposite of the information that the Revenue gave me. When I submitted my tax return, there was no problem with it.

Sound's like our original poster may need to speak to a professional tax advisor on this one !
 
Re: Renting out your PPR whilst abroad

Surely you're still tax resident or domciled in Ireland if you're just travelling-that's not the same as actually living in the UK, no?
 
Renting out your PPR whilst abroad

That isn't this questioners point. He is purchasing a house as his private residence but it will not subsequently be his residence. As he says he and his partner are planning to be abroad and his question is whether he would be detected by the powers-that-be if he he purchases under terms benefiting PPR purchasers if for an unspecified time A.N.Other to whom he lets the property will be paying his mortgage (i.e. the property will be being used commercially). That was my impression from the form of the question.
 
Re: Renting out your PPR whilst abroad

NoelC is correct when he says that the original poster should seek independent professional advice on the matter.

I dont know wherther or not he would have a liability in the circumstances described. But I think we have to be carefull not to suggest any course of action that might actually be illegal.

ajapale
 
Re: Renting out your PPR whilst abroad

TR,

Can you please post back here to let us know what your tax advisor offers as the best course of action.

I really do believe getting professional advice is your best option. Getting this wrong would be very expensive.

Noel
 
Hi,
Thanks for all of the replys.
Revenue say that we need to be living in the house for us to avail of the FTB incentives.
I think what we will do now is buy a smaller place as an inventment property and not avail of the FTB stamp duty incentive :-(
Thanks again!!
 
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