Not paying tax on rental income-good idea?

madisona said:
I would consider politicians, landlords, lawyers, estate agents and other privileged groups in our society as well able to defend themselves.
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On that point, just because someone can defend himself or herself it does not make it OK to make scurrilous generalisations about them.
 
Whatever about being OK or not such comments are certainly not conducive to mature and reasoned discussion of the issue.
 
There are a number of additional issues to take into account on the various numbers quoted. While there may be only 60k or so landlords registered for tax, it's worth recalling not only that some properties are in multiple units (have lived in many such), but also that the single-investment-property buy-to-let landlord is a relative newcomer in large numbers, and very many long-standing landlords have a number of properties. I'd venture an opinion - albeit an opinion only - that 60 thousand tax paying landlords probably represent the majority both of rental properties and of landlords.

I also know of some landlords who have no problem with paying tax but who refuse to register with the PRTB. While not condoning their non-compliance, it doesn't mean that they're non-compliant in all areas. Further, the PRTB's data collection isn't good and is unreliable in unit-counting where a landlord is registering multiple properties or properties in multiple units - so while registration has been disappointing it may not be quite as bad as it looks.

There's no doubt in my mind however, that major reforms are required throughout the property sector, whether it's regulation of selling agents, simplification of conveyancing procedures, regulation of mangement companies and agents, better enforcement of (hopefully more rigorous) building standards, monitoring of rental accommodation quality or regulation of landlords (including local authorities with housing responsibilities). There is a general principle that regulation should be appropriate and proportionate, and as the matter stands, there are a huge number of agencies with responsibilities and significant regulatory gaps... chasms, in some cases.

I for one would welcome the opportunity to have my rental property inspected between tenancies to ensure it's up to code - and if this were to happen and prospective tenants could ask to see your inspection score it might do a bit to drive the slum-creating ones out of business (though this will really work only if there's a consistent over-supply). I'd also love to see a one-stop-shop where I can get everything done easily and, to the degree possible, online. So far I can pay my taxes that way (though I haven't!), but PRTB registration is cumbersome and paper-based, and inspections are almost non-existent.
 
ClubMan said:
I did mention that earlier.
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I interpreted that as referring only to individual properties in multiple units (hence the "not only", referring back to your point) rather than the further issue I included regarding landlords with multiple properties. I do - at least mostly - read before responding!
 
Was merely looking for something to back up earlier assertion that many landlords pay no tax, which was based on anecdotal evidence and past experience. Part of the reason for so doing was the lack of figures
I would also not know how to interpret the figures in that article and they seem to contradict each other. In the same article where it says that there were 64,500 rental returns (revenue apparently) it also says that 40,000 landlords are registered for tax (from IPOA) and that only one in five landlords pay tax(Threshold) I would take the point that many landlords would have more than one property and that 64,000 returns could well represent say 120,000 properties.


So how many rental properties are there. How many rental households, How many of these are registered. How many landlords pay tax. How much evasion is there. How proactively does Revenue pursue landlords that evade tax?
Bottom line. I have no idea how many landlords pay tax today.


Regarding legal protection I would be of the view that the protection should be given more to the tenants that the landlords. For one it is a home, for the other a business. I have lived in other countries there was security of tenure and legal protections for both parties, where people saw no problem with renting for life. The situation in Ireland was totally different. Practically no security of tenure or protection from unscrupulous or exploitative landlords and I would guess that this is not unrelated to the Irish desire to own. Btw this situation as far as I can see has not changed that much. A landlord can easily decide to evict a long term tenant with a few weeks notice. He merely has to say that he “intends” to sell the property. Also in answer to a previous post, there are no squatters rights in Ireland (unless someone occupys a property without paying rent for something like 12 years)and eviction usually requires just 4 weeks notice. I have also in the past seen evictions where someone gets back to their home to find the locks changed and their belongings thrown out in the rain.


I would also accept that there are now many amateur landlords, those that have bought an “investment” property in the hope of making money down the line on capital appreciation, that many such landlords are struggling to meet mortgage payments, that they are registered, pay tax and treat their tenants properly, that they can sometimes be stung by such tenants not paying rent or wrecking their properties.

I wouldn’t accept that my generalizations about tax avoidance by a class of people were necessarily scurrilous or that there was no truth in them. All generalizations admit exceptions. E.g. politicians are crooks; lawyers will rip you off, limerick people like using knives. Cork people have an inferiority complex and a chip on their shoulders. I would not however make similar derogatory generalizations about those that may not be is a position to defend themselves or their interests or who would be imo hurt and offended by such generalizations. e.g the homeless, mentally disabled, ethnic minorities etc
 
I'd trust Revenue, who do know what they're talking about. The IPOA I wouldn't trust at all and on principle I'm not a member - they've been lobbying against tenants' rights for years, and I have a serious problem with that. I am in broad agreement with Threshold's aims, but they're prone to unbased assertion so I wouldn't trust them when they're in rant mode (which is for quite a lot of their public pronouncements!).

There's a balance to be struck in relation to rights for tenants and landlords, and I agree there's a major point - and possibly one not often enough made or acknowledged - in the fact that it's the home of the one, but just the business of the other. As I see it, tenant protections work disproportionately for unscrupulous / anti-social tenants but don't sufficiently protect run of the mill decent tenants against unscrupulous landlords.

I wouldn't be so extra gentle with the amateur landlords either, if I were arguing your case. No-one should buy in if they don't do the sums and a reasonable level of stress testing, and vet tenants, and in general take their responsibilities seriously. Any landlord stung by tenants wrecking the place is disadvantaged in their business and investment - whether they're "amateur" or "professional" shouldn't make that much difference.
 
Interesting evolution of your views in this thread...
madisona said:
A lot of landlords pay no tax on rental income and are not worried about being caught.
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madisona said:
then you are in the minority of landlords that does.
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madisona said:
I do not know how many landlords pay tax although I would now accept that it is probable that the majority do today.
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madisona said:
Bottom line. I have no idea how many landlords pay tax today.
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ClubMan said:
Interesting evolution of your views in this thread...
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CM, in a former life you must have been my English teacher...

IMHO, given the amount of posters on AAM that have asked questions about stamp duty and whether or not the clawback exist, one might be forgiven for thinking that there are some people who are being a bit "cute" about their taxes in relation to property. Doesn't mean all landlords are at it though!
 
OF course landlords pay as little tax, if any,that they think they`ll get away with.When one considers the extremes that peaople went to to avoid paying tax such as bogus non resident a/cs and a whole array of legal measures that the rich employ......it is no great surprise that landlords can avoid tax....after all it is a cash buisness and many "expenses" can offset the tax.
Maybe it was o.k. before as rents were small...but surely now as even landlords with ..say 2 semi-detached 3 bed houses....charging 100e a room and converting the sitting room to an extra bedroom...thus clearing 400e a week or 20,000e a year per house.....are raking in serious money.
Revenue officers should target this huge rental income, where tax is avoided on a collosal scale.Maybe our government could divert resoucres from tackling small scale benefit fraud and go after the serious money.
 
madisona said:
Regarding legal protection I would be of the view that the protection should be given more to the tenants that the landlords. For one it is a home, for the other a business.
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Why shouldnt both be entitled to protection? Just because its a business does not mean the landlord can afford to be ripped off, robbed or whatever evil possesses the tenant.


I have lived in other countries and currently live in switzerland and was both a tenant and a landlord in Ireland. Ireland is the only country Ive lived in where there is little or no protection for the landlord and only protection for the tenant. You talk about exploitative landlords but you dont give any examples? I am not saying there arent bad landlords, there are. There are "bad" people in all walks of life (including tenants) but the tenant has protection. It is a tenants right to insist on contract, in fairness if you dont you are waiving a lot of your rights.

madisona said:
Btw this situation as far as I can see has not changed that much. A landlord can easily decide to evict a long term tenant with a few weeks notice. He merely has to say that he “intends” to sell the property.
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Again, not accurate. Under PRTB this is not the case. I evicted a tenant last year for exactly that reason. I had to give 52 days notice per PRTB as she was in the property more than a year (eventhough she had stopped paying rent, she was protected I was not). The longer the tenant stays in the property the longer the notice.

madisona said:
Also in answer to a previous post, there are no squatters rights in Ireland (unless someone occupys a property without paying rent for something like 12 years)and eviction usually requires just 4 weeks notice.
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I assumed it was squattors right that protected these tenants, they certainly werent in the property 12 years. Parents of a friend of mine rented a house in donnybrook to a lawyer and his wife (quite a high profile) opera singer. They paid rent for a little over a year. Then they stopped. They changed locks wouldnt open doors. When the landlord called over wasnt let in. Answered solicitors letters with solicitors letters. This family had to bring the tenants to the high court to get them out. From the time theyd stopped paying rent they remained in the property for a further 18months as this slowly went through the courts. My friend said that as a lawyer he knew exactly when to stop paying rent and at what point he was protected by his tenancy rights (it was only just after a year). I assumed thats squattors rights but its probably another right. When they eventually got this pair out they had destroyed the house (grafitti even on all the walls) and even more upsetting were renting another house in ballsbridge within the month. This cost this family an absolute fortune in bills but even more in worry and health problems (brought on by stress).


Madisona, from reading your posts its seems (apologies if Im wrong but you do come across like this) that you are not nor ever have been a landlord. That you have been a tenant and have had or have known people who have had rotten landlords. I feel you are not seeing the whole picture. For my part Ive been both and have had both. While I once had a rotten landlord I did have a contract (which I insisted on) and which I took out at every meeting (few though they were) as a landlord Id no such protection. My contracts were ignored, my house destroyed, rent unpaid - calls ignored etc. There is no protection.

All landlords should register with PRTB, all landlords should pay tax. But all landlords should get basic protection for that tax being paid and if they did, maybe more landlords would be registering with the likes of PRTB.
 
I presume that each occurrence of "avoid" above should have been "evade"?
 

I think "a few weeks" is accurate. I assume that 52 days is for more than 2 years

Eviction notice required to terminate a tenancy that has lasted between six months and two years

Less than 6 months 28 days

6 or more months but less than 1 year 35 days

1 year or more but less than 2 years 42 days

Nope. I've never been a landlord and my opinions are to an extent based on my experiences of them in the past.
 
Sorry typo, it was 42 days not 52 days notice I gave her. Just to reiterate that is 42 days notice to someone who wasnt paying rent. 42 days is still 6 weeks not a couple of weeks. Again, she (the tenant) was protected me (the landlord) was not.

Madisona, why dont you think Landlords are entitled to protection as well as tenants? Surely it is in a tenants interest as well? If the PRTB were to more strongly regulate both landlords and tenants then both parties would be happy. Ideally in this model properties would have to be to a certain standard, rents can only go up to a certain amount. Should this occur Ireland could become more of a successful rental society which would be in the interest of tenants given that houses are over priced currently.
 
Strong regulations and the enforcement of them would serve the interests of responsible tenants and landlords. My advocacy of protection for tenants does not in any way mean that landlords should not also be given protection from tenants that would seek to abuse their position.
 
Two quick points;

- Any half-decent accountant will be able to legally whittle down any landlord's tax bill to next to nothing, given our current tax regime which gives unlimited mortgage interest tax relief to landlords (by comparison with the fairly low limit of relief given to residential purchasers)
- All it takes is 1 tenant to claim their rental tax relief for the Revenue to have a strong indication of the existance of a rental property.
 
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