Need urgent advice re TRS

Can anyone tell me if we were entitled to TRS on our second home purchased in 2007.

Our TRS was removed earlier this year, but we have now received a letter from Revenue saying we owe them for "overpayments" of TRS going back to 2007!!

We purchased our holiday home in Cavan for our own use only, it is not an investment property, i.e. we never rented it out.

We filled in the relevant TRS1 form at the time, and were approved for it by Revenue.

We have now received this bill and I am distressed to say the least, but I need to get my facts right before I contact Revenue.

Does anyone know if we were entitled to TRS or not ? And if we weren't, why were we approved for it at the time ? Can they do this ????

You can only claim TRS on your principal private residence - one property. Everything other than your PPR is classed as "investment", even if you didn't rent it out. So yes, you will have to repay TRS. You'll also have to pay the NPPR fee of €200 a year (sorry to add to your woes).

As there were errors on both sides, Revenue may allow you to repay over a period, rather than in one lump sum.

Thanks for that. We've already paid the e200, but this is a much larger bill!

I should have added that we cleared off the mortgage on our PPR before we took out this new mortgage, so we were only claiming TRS on one property .... does this make any difference ?

I had already thought of your suggestion about paying it back in installments because we don't that kind of money sitting in a bank a/c ready to hand over to them (i.e. not being a banker/developer!).

I'm really annoyed that they approved it in the first place tho, I mean they are supposed to be the experts :mad:

That you cleared your mortgage on the PPR won't make any difference unfortunately. TRS can *only* be claimed on your PPR and, if you weren't living in the other property as your principal residence, then TRS won't apply.

In fairness to Revenue, you did apply for TRS on a property that you weren't entitled to. I don't know how good their checks are to cross-reference against the same PPS number to see if more than one property is being claimed, but I know that, for example, if you move house, it's up to the individual to contact Revenue to stop TRS on the old property -they won't know to automatically stop it on one property if you apply for TRS on another. Had you asked them specifically whether TRS applied, I'm sure they would have told you that it didn't and there's a certain trust basis on which they accept the TR1s. Their mistake won't help with the base issue of having to pay back the TRS, but may help in asking them to accept installments.

We obviously thought we were entitled to it at the time, otherwise we wouldn't have applied. I suppose the only consolation is that they realised the mistake now and not in 15 years time! I'll contact them on Monday. Many thanks for taking the time to reply WaterSprite

But is it the case that claiming TRS versus claiming your interest payments against rental income. You get more tax back with interest against rental income as TRS is capped at a fairly low level?

Obviously you are not renting so cannot claim interest against rental income....but in other cases??

When you signed the TRS1, you signed a declaration which said that the loan was in respect of the purchase of your main residence. This is quite a clear statement in the document that you signed. That is why the Revenue approved it, because you told them that it was your main residence. It is not really an acceptable excuse that they did not double check it at the time.

yes but it's always someone else's fault!! how can people be expected to take responsibility for their own actions?

We had a perfectly civil thread going...

OP was mistaken as to her entitlement to TRS, therefore applied for it. Yes, that was a mistake but, according to OP, she honestly thought she was entitled. I also think it's not unreasonable to think that Revenue should know by their records who is claiming TRS and who is not and be able to cross-check to see that the same party is not claiming on two properties. Revenue appears not to have such a system in place, which I can also understand, considering the complexity of the various data they have to keep track of, but it is unfortunate.

It's always distressing when you make a mistake on your taxes and then get a bill much later than you expected - it's happened to me. I didn't blame Revenue, but that doesn't stop you feeling frustrated and upset about it. In fairness to OP, she's prepared to take the medicine and pay back the money and hasn't engaged in the wailing and gnashing of teeth that we've seen on other threads. And, thankfully, she didn't ask the question that we see a lot on other threads: "how would Revenue know that it wasn't my PPR?" So give her a bit of a break?

@Mommah, yes the interest relief on an investment property is potentially greater - 75% of interest payments with no cap, but it has to be offset against rental income (which OP does not have, as you say).

WaterSprite said:

I also think it's not unreasonable to think that Revenue should know by their records who is claiming TRS and who is not and be able to cross-check to see that the same party is not claiming on two properties.

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She signed a form declaring that the holiday property was her main residence.

As she has already stated, there was no mortgage outstanding on her actual main residence, so Revenue would not have seen that there was a second property as she wasn't claiming TRS on 2 properties at the one time.

Yes, exactly, and I'm prepared to take the hit for my own stupidity .... I admit I didn't read the TRS1 form properly at the time. I just wanted clarifcation of my entitlements before I make contact with Revenue and WaterSprite kindly provided me with that. Thanks & regards.