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