What property taxes do I have to pay out? Where is the dirt coming from? Is gazumping legal?
I am living abroad and have been renting since 2009 in various locations in Ireland and the UK which meant I could not live in the one and only property I own anywhere ‚Äď in Dublin.
It was entirely unclear to me whether the non-principal private residence (NPPR) tax applied to me. As it was initially referred to as a ‚Äėsecond home tax‚Äô I did not pay it. I was unaware of the exorbitant charges that applied to late fees. I was only accidentally aware of it following an article in The Irish Times emigrant blog last week. I paid the local property tax (LPT), but did not get a bill for NPPR.
However I was so frightened by the charges I paid this ‚Äėsecond home tax‚Äô yesterday which has sucked up half my savings. I would be most grateful (as would thousands living abroad) if you could clarify whether NPPR should/does apply to people with only one property but renting abroad or even in Ireland due to work?
All property taxes relate to the location of the property and not the owner, so in short the NPPR does apply to this scenario. The phrase ‚Äúsecond home charge‚ÄĚ would lead you to believe it was for a second home, or holiday home but it related to all non-principal private residences.
The legislation governing this tax is called the Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011, and it introduced a ‚ā¨200 annual charge on non-principal private residences for the years 2009-2013, payable by the owner of that property to the local authority in whose area the property is located.
Revenue deems that you can only have one principal residence (the house that you normally live in, whether you rent it or own it). Therefore if you own only one house but do not live in it, it is a non-principal private residence and therefore liable for the tax. Severe penalties accrue for non-payment, and if you had never paid the charge the full amount owing now is an alarming ‚ā¨7,230, and is capped at this amount. Late payment charges not paid will be registered as a charge against that property for 12 years, or until the amount owing is paid. If you wish to sell the property within that time, the full amount will need to be cleared before the sale can be completed.
Anecdotally, some local authorities were lending a sympathetic ear to people who were non-resident for the period of the charge, but as you have now paid it, I cannot say if any form of refund can now be claimed.
Another point of clarification is necessary. The ‚ā¨100 annual Household Charge due in 2012 which applied to most residential properties was also liable in addition to the NPPR. If the ‚ā¨100 was not paid in 2012, the amount owing is now ‚ā¨200 and this is to be added to your LPT liability. You are liable for this and, as you were abroad, you may not be aware of this fact and I recommend you contact Revenue to ensure you are being assessed for the correct amount.
Finally, if your property is rented you will need tax advice on the treatment of any rental income received from your property. Different arrangements apply when a landlord is non-resident, and generally 20 per cent of the rent must be deducted at source and forwarded to Revenue.
Edward Carey is a residential surveyor and a member of the Society of Chartered Surveyors Ireland Residential Agency Professional Group
How do I negotiate a rent increase with my landlord?
I have been living in a rented property for the last 12 months. My landlord recently informed me that he is considering increasing the rent by ‚ā¨100. I believe that this level of an increase is excessive; however, my landlord seems to be willing to negotiate. Obviously I am anxious to keep the new rent as close as possible to the old rent. Is there any advice you can offer me in advance of these negotiations?
Most of the rules defining rents and increases are set out in the Residential Tenancies Act 2004. S24 defines the market rent as ‚Äú. . . the rent which a willing tenant not already in occupation would give and a willing landlord would take for the dwelling, in each case on the basis of vacant possession being given, and having regard to (a) the other terms of the tenancy, and (b) the letting values of dwellings of a similar size, type and character to the dwelling and situated in a comparable area to that in which it is situated . . .‚ÄĚ
S20 dictates that a landlord cannot increase the rent on a premises more often than once in any 12-month period, and S19 states that the rent cannot be increased to more than the prevailing rents at that time. Certain exceptions apply if any works have been carried out to the premises within the 12-month period. You must be given 28 days‚Äô notice in writing of the increase, so as I read your question, the landlord is following the correct procedure.
You should firstly consider the rent sections of Daft.ie and Myhome.ie to see what similar types of accommodation are renting for in your area. As rent levels can change quickly, you need to be sure you are capturing the latest information. A call to a local estate agent should also inform you of current rent levels, and if there are a number of other properties available to let which will give you other options if you are unable to agree. An increase of ‚ā¨100 per month in a 12-month period seems reasonable, and you should consider that he may not be seeking a full increase.
Most landlords want a good quality, long term tenant who will adhere to the terms of the lease. I don‚Äôt mean that a landlord should not adhere to his obligations under a lease, but only recently a landlord informed me that he had decided not to increase the rent as he was perfectly satisfied that the property was being well looked after, the rent was being paid promptly and he did not wish to upset the arrangement with the tenant. This is certainly an exception, but demonstrates clearly that where there is a good working relationship between a landlord and tenant, it is not always about the money. The Private Residential Tenancies Board (PRTB) produce useful guides for landlords & tenants, which you should be aware of. You should also establish if your landlord is willing to consider a longer-term lease; however, in periods of escalating rent levels, he may not be willing to do so.
My own approach would be to set out clearly that you are satisfied to remain on in the premises if you can agree the increase; that, presumably, you have a good working relationship and that the property is being well looked after; and that you are suggesting an increase of less than the proposed rent (if the ‚ā¨100 is to the full market rate). Your landlord will be aware that if you do vacate the property he will have the costs of re-letting the property, new PRTB charges, perhaps a void period in the rent whilst the new tenants are moving in and maybe some redecoration works, and on balance may well see the advantages of reaching an agreement with you.
If you are unable to reach agreement, either side can refer the dispute to the PRTB and you should contact them directly to ensure the correct procedures for dispute resolution are being followed.
Edward Carey is a residential surveyor and a member of the Society of Chartered Surveyors Ireland (SCSI) residential agency surveyors professional group
Rental house to be put up for sale
I have been renting a house for the last two years and I was recently informed by my landlord that he is selling the house due to pressure from the banks. What are my rights in this situation?
I‚Äôm not sure if you have a concern that the landlord might also be seeking vacant possession of the property, but whether or not he is, your rights as a tenant are not affected by his decision to sell. It is now quite common to see residential properties being sold by banks, receivers or owners with tenants in situ, but your rights as a tenant are also not affected when the new landlord takes ownership ‚Äď he or she must adhere to the existing provisions of the tenancy agreement up until the term expires. The new owner very simply steps into your current landlord‚Äôs shoes.
The relevant legislation is the Residential Tenancies Act 2004, which sets out the rights and responsibilities of landlords and tenants.
The issue surrounding vacant possession depends very much on the type of lease you have, and whether or not there is a provision to break that lease. Most landlords enter into a standard one-year fixed-term agreement at the commencement of the letting, with fewer renewing that lease at the end of the first year and the arrangement continuing on to a monthly tenancy, called a Part 4 tenancy, as dictated by the 2004 Act.
If you both had renewed to a new lease at the expiry of the first year, you can simply check the terms of the lease to see if there is a break clause. I very much doubt it. In this instance the landlord cannot break the lease once you adhere to your terms, and he cannot rely on the provisions of section 34 of the Act. It does not prevent the property being sold, however.
In the second instance, where the lease was not renewed, the landlord is entitled to seek vacant possession if he intends to sell the property within the next 30 days, and the steps to do this are clearly set out in the 2004 Act with relevant templates available on the Private Residential Tenancies Board website. You must be provided with 42 days‚Äô notice, once you are in occupation for between one and two years.
Great care must be exercised by the landlord in serving these notices, and if any step is incorrectly followed it invalidates the previous steps and he must commence the process again.
My own approach would be to talk to the landlord, in parallel with the formal process being followed. Early communication will probably lead to as amicable a solution as possible between you both.
If he is entitled to seek possession, you should acknowledge that fact and let him know you are seeking alternative accommodation. In addition, it may well be the fact that investors have an interest in the property and it might well be the case that they would prefer to purchase a property with a good-quality tenant in situ.
Edward Carey is a residential agency surveyor and a member of the Society of Chartered Surveyors Ireland‚Äôs residential agency professional group
The landlord won‚Äôt give us our deposit back. What can we do?
My wife and I were renting a house in North Dublin for some time, however we recently vacated the property due to the fact that I found a new job which necessitated that we move. The house was let by an agency who collected my deposit when I moved in and the subsequent rental payments.
Since moving out, my deposit has not been returned and when I raised this issue with the agency, they informed me that the landlord seems to be refusing to return our deposit. The agency insisted that the landlord is obliged to return our deposit and if the problem persists we should contact the PRTB.
It comes as a surprise to me that the agency can simply absolve themselves of any responsibility for the return of my deposit given that they collected it in the beginning. Is this the case? Any help would be greatly appreciated.
Deposit retention is an issue that frequently crops up at the end of tenancy agreements. The legislation that covers your query is the Residential Tenancies act 2004, and the Property Services (Regulation) (PSR) Act 2011, and the PRTB is the relevant forum for adjudicating your complaint.
To deal firstly with the issue of the agent collecting the deposit and paying it onto the landlord, the PSR Act sets out in Paragraph 16 of the required letter of engagement between a letting agent and his client (the landlord) that the deposit must be paid by the agent to the client (in this case your landlord) when the tenant enters into the property. (‚Äú16.2: Any moneys paid by a person to an Agent as a ‚Äėtenancy deposit bond‚Äô to secure against breaches of the tenancy, such as damages or non-payment of rent, will be paid into the Agent‚Äôs ‚Äėclient account‚Äô identified in clause 19. The ‚Äėtenancy deposit bond‚Äô shall be paid to the Client once the tenant has entered the tenancy.‚ÄĚ).
The letting agent was therefore correct to pay the deposit to the landlord. It is good practice that it is made clear prior to the commencement of the tenancy that it is the landlord who will hold the deposit. In some instances the landlord will request that his agent holds the deposit by separate arrangement to avoid cash-flow issues at the end of the lease. You should note, however, that the deposit remains the lawful property of the tenant unless the landlord establishes a right to it, and the onus is on the landlord to prove why part or all of the deposit should not be returned.
I note that you‚Äôve stated in your question that you recently vacated the property due to the fact that you have found new employment and it was necessary that you move.
You have not stated under what form of lease you occupied the property and I presume you signed a standard fixed-term tenancy agreement. Your rights are generally not affected in the event of a new fixed- term agreement not being in place. It is the responsibility of the landlord to register the tenancy with the PRTB, whether he does this himself, or has the letting agent do it on his behalf.
You can check yourself whether or not this has been done. I presume that you then fully complied with the terms of your lease, that the property is not damaged beyond normal wear and tear and that there are no unpaid utilities. I also presume that you served the correct notice on your landlord of your intention to vacate the property and that you are not breaking a fixed term lease ‚Äď a common misconception among tenants is that a landlord can be given a month‚Äôs notice of their intention to vacate a property.
Presuming, then, that the correct notice was served and that there is no valid reason on the face of it for the landlord to withhold the deposit, you may take a case against your landlord via the PRTB website at a cost of ‚ā¨15, or via a paper application to the PRTB at a cost of ‚ā¨25. Mediation by the PRTB can take a number of weeks and adjudication of the case may take a number of months. Many landlords do not keep the deposit in an account separate from their own funds and the return of a deposit can cause cash-flow problems and your landlord may well find himself in this situation.
There has been discussion for some time about the possible establishment of an independent deposit protection scheme. The SCSI has made a number of submissions on this issue, however it does not look as if any significant progress has been made in relation to it.
Edward Carey is a member of the Society of Chartered Surveyors Ireland (SCSI) Residential Agency Surveying Professional Group