LPT: Every tenant of mine is paying it.

There is nothing in the legislation that precludes a LL from increasing rents according to Market norms and increases in costs etc. And LL's will do this so long as doing so keeps the rent at an appropriate level for the area/property. Thats sound management.
If I recall correctly, oldnick said he gives 6 months notice of such an increase. That's more than fair and reasonable.

I have sketched a FAQ on the issue to separate the FAQs from the arguments

Landlords, tenants, The Local Property Tax and Income Tax

oldnick said:

I wonder if other LLs were as stupid as me ,not realising that one has to charge TWICE the property tax- in reorder to recoup the loss ?

I suspect some LLs were even stupider and haven't passed it on at all....

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Well thanks to you we now know to charge double. But if it's tax deductable then you'll have to do a new calculation.

Actually in my own situation I never increase rents for sitting tenants so I'll just take the hit. Plus I've good tenants so no need to upset them. I don't have leases as they are not worth the paper they are not written on so I can have a rent review anytime (subject to proper notice) I just hope it will be tax deductable. I have in any case some social welfare tenants and they cannot have their rents increased. But if water charges come in than they will have to pay for that. I see that as a utility.

I think the poster Brenda is on shaky ground getting the LPT as a separate payment from her tenant and not declaring it as rent. And I think Thresholds advice is nonsense. Landlords can increase rent to market value. You don't have to say it's to cover the LPT that's all. It's another cost of business.

Hi Bronte, I agree with everything in your post and its a good summary of the discussion so far.

But...

Bronte said:

And I think Thresholds advice is nonsense.

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What part of Threshold's advice on LPT and Tenants do you consider nonsense? They dont seem to say very much in their website beyond "If your landlord seeks to pass this tax on to you directly please contact your nearest Threshold office for further advice." And their advice doesnt seem much at odds with that availiable on other sites such as citizensinformation and Society of Chartered Surveyors and the Irish Tax Institute.

aj

Perhaps the wording of
".. if your LL seeks to pass this etc ..." can be confusing.

a) Does it mean if the LL tells the tenant to "directly" pay it ? Which the LLs cannot do and LLs know this.
or
b) Does it mean that if the LL tries to recoup the loss through increased rent contact your nearest office for further advice... ?

-which suggests that it is wrong for the LL to raise the rent to recoup the loss, something that the LL is perfectly entitled to, as long as the LL follows the other guidelines in the Threshold quotes.

Perhaps it is the better LL who is trying to keep rents down and who follows all the rules who may feel somewhat over-sensitive (not me of course!) to comments from Threshold
that may mislead some tenants into thinking that the Ll may act wrongly in seeking rent increases to recoup the LPT cost.

Its really very simple. LPT will be paid from the LL income. LL income is rent.

Saying the LL can't pass it on to tenants, is meaningless in that context.

ajapale said:

What part of Threshold's advice on LPT and Tenants do you consider nonsense? They dont seem to say very much in their website beyond "If your landlord seeks to pass this tax on to you directly please contact your nearest Threshold office for further advice."

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If they had any way of stopping landlords being allowed to charge this it would be stated on the website. Landlords are not going to charge the LPT to the tenants, they are going to increase the rent to market value, which there are entitled to do.

I notice on the latest Daft report (quite good one on state of rental market) that one of the comments on the report states...

"... according to Threshold LPT is not a cost that should be passed on to the tenant.."

This is why Threshold's statement was not only nonsense -it was misleading nonsense , giving the false impression to tenants that the cost of this tax could not be passed on ,and that by doing so LLs were acting wrongly or illegally.

But Threshold dont state this on their website!

This is what they do say:

Threshold said:

If your landlord seeks to pass this tax on to you directly please contact your nearest Threshold office for further advice.

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I dont see whats nonsensical or misleading about that statement.

The threshold website does not go as far as the public information guide from the society of chartered surveyors and the Irish Tax Institute which states:

My landlord is increasing my rent to cover the LPT – can he do this?

The LPT is the liability of the landlord/owner of the property. It is not payable by the tenant.

If the landlord is seeking to increase the rent beyond market rates, you can dispute this by contacting the Private Residential Tenancies Board (PRTB).

In the first instance you should check your lease agreement which will usually stipulate that rent cannot be increased during the existing lease period as a general rule with a fixed term lease.

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Bronte said:

Landlords are not going to charge the LPT to the tenants, they are going to increase the rent to market value, which there are entitled to do.

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Agreed, thats my understanding of the situation.

I think, ajaple, that LLs and you are not going to agree as to the probity of the "advice" given by bodies such as Threshold.

We feel that Threshold's advice is written in such a way that it gives the false impression to tenants that LLs cannot pass on the costs to tenants -and that to do so is wrong/illegal.

Indeed, that is why I quoted a tenant ,writing on the latest Daft report on the rental market, who got precisely such an impression based on Threshold's statement.

It is not only Threshold - but generally the advice and statements given by "helpful" bodies is construed in such a way by tenants that they do not feel or understand that the LPT will be ,ultimately, paid by them.

Therefore the advice by the experts has proved most unhelpful and misleading.

The daft rental report (pdf) makes for very interesting reading.

However the quote you refer to is merely a post (by Joan) in the comments section of the daft.ie site and not part of the report itself.

I have quoted threshold.ie, the society of chartered suveyors/ tax institue above and dont find any of them to be misleading or nonsense.

Perhaps you could link to statements at threshold or other bodies you consider to be nonsense or misleading and we can judge for ourselves.

Being a landlord is a business. To stay in business you need to make a profit. If it becomes unprofitable you go out of business.
The demand for higher standards costs extra money to provide them and this in turn has to be passed on in the form of higher rents.
The business of being a Landlord is very marginal at the moment and for some it has been unprofitable.
The extra costs that are being imposed by Government have to be taken into consideration by a Landlord when calculating the rent for their property. That is the reality of business so Government should take note of their cost impositions on Landlords as the costs will eventually be passed onto Tenants.
The debate on this thread is about charging the LPT to Landlords and Landlords getting Tenants to pay it is somewhat technical and legalistic when in fact there is no need to mention it when discussing it at letting time or rent review time. The market will dictate the rent but costs to the Landlord will also be reflected otherwise landlord goes out of business.
The views of experts and quangos etc will be quoted in the media but the costs incurred on the Landlord have to be reflected in the rent charged

Any business has a responsibility to shareholders to maximize profits.
The LL is the sole shareholder in their business.
They should charge the max amount that they can, so it doesnt matter at all whether anyone thinks tax and other costs are included or not.

At the moment rents in Dublin are going up, partly because of the increased costs on landlords, who need to increase rent to stay above water. Those who are ok at the moment are also increasing rents, simply because they can. They are maximising profits. Rents are rising. Now any landlord in Dublin that couldnt pass on the extra taxes and charges before, probably can now.

And this crap about not being able to charge above market rates is just that - crap. It means nothing at all. Imagine 5 apartments in a building that are renting for €1000PM. Most would say thats market rate and you cant charge more. Well something has to give or rents would never go up if noone can charge more than €1000. What if the landlords furniture is better quality than the rest. His is worth more. If he asks the tenant for more and gets it, then thats the market rate. If he advertises for more and someone will pay, then thats market rate. Upper market rates must be tested, in order to raise the market rate. If noone but, then thats another story.

Threshold really just make it up as they go along and should be exposed for the chancers they are.

Where is the legislative backup to support the proposition about market rents and how they are determined?. Can someone post a link

Dermot said:

Where is the legislative backup to support the proposition about market rents and how they are determined?. Can someone post a link

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Hi Dermot,

See #27 in this thread LLPT: Every tenant of mine is paying it.

Citizens Advice said:

Under Section 19 of the Residential Tenancies Act 2004 (pdf) Landlords cannot charge more than the open market rate for the apartment or house.

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19.
—(1) In setting, at any particular time, the rent under the tenancy of a dwelling, an amount of rent shall not be provided for that is greater than the amount of the market rent for that tenancy at that time.


aj

ajapale - you state in post 73 that the comment made was by a person called Joan and not by Threshold.
That was exactly my point- to show how Threshold's statements misled people. You may not think they were misleading.

Most LLs I know believe they were misleading-and numerous posts on many websites have similar nonsensical comments to Joan - i.e. LLs can't pass it on.

A nonsensical belief that -in my opinion- Threshold's statements encourage.

Thanks ajapale for the link.

I cannot see how it can work in practice. A professional landlord will be unlikely to deliberately price his/her property well over the market price and equally I cannot see a tenant with all the information at their disposal will go madly over the top in paying the rent. There can be exceptional reasons why a property could rent higher than any other property in an area.

I cannot see how any organisation could rule that a particular house/apartment was over the open market rent and make that stick in the courts.
Has there been a successful case taken against a landlord?

I just feel that organisations who keep stating that Landlords cannot charge more than the open market rate for the apartment or house are giving false hope to Tenants and like to feel that they can bully landlords.

To stay in business landlords need to make a profit, to make a profit they must keep their properties let, to keep their properties let they will charge the market rent.

No need for advice from Quangos who do little for either good Tenants or good Landlords other than to add on costs which either the Landlord has to absorb or the Tenant has to pay or a bit of both.

Off topic post and a reply moved to Landlord increasing rent.

This thread deals with the LPT, landlords and their ability to recover the some or all of the tax from tenants.

OK so Threshold.ie is an advocacy group for tenants and PRTB is the industry regulator and the Dail is our national parliament which has imposed the wretched LPT on us property owners.

But the Irish Tax Institute and the Society of Chartered Surveyors of Ireland in their useful, independent and comprehensive online guide [broken link removed] state the following:

My landlord is increasing my rent to cover the LPT – can he do this?

The LPT is the liability of the landlord/owner of the property. It is not payable by the tenant.

If the landlord is seeking to increase the rent beyond market rates, you can dispute this by contacting the Private Residential Tenancies Board (PRTB).

In the first instance you should check your lease agreement which will usually stipulate that rent cannot be increased during the existing lease period as a general rule with a fixed term lease.

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I dont think any of the three sentences quoted are false, misleading or nonsense.

You just haven't got the point Ajaple. So I'll have one last go and then I'll give up.

In all these helpful advice snippets that you quote every word of what is said is ,of course, accurate.
But they do not give complete advice. A half-truth is as bad a lie.

By posing and answering the question in the manner quoted a tenant may believe that there should be no rental increase as a direct result of the tax.

There are comments on several websites suggesting that LLs are wrong in passing on the tax inside a rent increase, which of course a LL is entitled to do.

If the so-called helpful advice snippets wanted to be properly informative they should have written something like this....


The LPT is the liability of the LL/owner of the property. It is not directly payable by the tenant.
However, the LL/owner is entitled to raise the rent to cover the cost of LPT if he/she so wishes

-Now that would tell tenants that ,yes, the LLs can and probably will increase the rents -something that tenants should be made aware of. That would be proper ,full and sensible advice as regards passing on the cost of the LPT, along with the last two lines.