Paul O Mahoney
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Well we pay preliminary taxes on rent due, 90% of it in fact.I don't think this is entirely correct.
Tax is payable on the rent due, rather than on the rent received. If the rent received is less than the rent due, the difference can be expensed as a bad debt, subject to the usual rules which govern deduction of bad debts.
In other words Revenue are entitled to ask what efforts the landlord made to recover the amounts due, and if they are unhappy to disallow the claim for bad debt as a deduction.
A few years ago a tenant of ours left on of our properties without notice and left the house in a pretty shabby way.
I did our taxes in November and the house was being repainted repaired etc, that cost was over €6000, and the 3 months from October to December there was no rent from the property.
I submitted the tax return along with the preliminary taxes for the current year and a week later actually 2 days before the DD was due to come out of the bank a note was posted on ROS asking why the preliminary taxes were so low and " not in line previous years " I scanned the repairs quote and the email from the tenant, and they accepted my explanation.
This might be an isolated situation but it did happen, that's why I'm surprised people think Revenue don't have an issue or don't look at figures.
I still believe that selling after the property becomes vacant is more equitable for both tenants and landlords.
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