Myself and my husband are looking at a really beautiful home that we are wanting to have on a long term let basis (2-3yrs)
The landlord lives overseas and i just did some google stuff which looks like we are going to have to pay the revenue 20% of the value of the rent as well as the rent amount (cover the tax of the landlord in his absence) as we will be paying directly into his bank a/c (different if its to an agency apparently as they look after that stuff).
Has anyone out there any experience of this or any ways around it as it may have that home out of our league being potentially stung for another give or take 2k per year to the tax man!
Many thanks to anyone with adivce
Hi, my friend lives overseas and rents out her apartment here and I am 99% sure that she is the one paying the revenue and not her tennants. I would have thought it was the landlord's responsibility to make sure this is paid- the tennants shouldn't be penalised because the landlord is overseas. Best of luck- hopefully you can take the house.
As far as I know, it's depends on whether the landlord is resident or not.
For instance, if you were renting from a UK resident who doesn't have an Irish PPS number, then you pay the landlord the rent amount less 20% tax.
But if the landlord has just moved abroad for a year or so, then they can complete their tax returns as normal including the rent amount.
You'll have to ask the landlord or his agent.
Its a tough one from from what i can make out, they are overseas for the unforseeable so may be Irish but not acutally resident here (god flippin red tape!)
Here's whats said on threshold.ie
If you live in private rented accommodation and pay your rent directly into your landlord's bank account and your landlord lives abroad, you are obliged under law to withhold 20% of the rent.You are then required to pay the withheld rent to Revenue Commissioners to settle the landlord's tax liability. You will need to make an annual return to the Revenue Commissioners.If however, your landlord is not resident in the state but you pay your rent to an agent, there is no requirement to make the deduction.
I suppose in a nutshell we withhold 20%, but then thats not what the landlord is quoting. I feel like we are being led up the garden path here and im just going to have to thrash it out with the agency who are letting it. I was only really looking for others advice on it to see how they went about it all without getting stung by the revenue too!
But you're not being stung for the money.
If the house is €1000 per month, you pay €800 to the landlords account and withhold €200 to send to Revenue.
If it's being let through an agency, you give them the €1000 as normal and they sort it out.
The landlord cannot tell you the rent is €800 per month and you have to pay the extra €200 yourself!
I found this on the Revenue website - hope it helps!
Its actually a case of false advertisment from what we know so far, we are going to chat to the agency lady again later on about it. Its a strange one to be faced with. We need to be a bit clearer on whats the real rent if you know what i mean!
From my searches there have been lots of people who signed contracts completely unaware of this set up and been cought to pay the revenue the 20% additional at the end. Sounds crazy but thats whats happened and i really dont want that either.
We are better to know now than then.
Fingers crossed and thanks for your advice.
thanks a mill, thats really useful to have.
I am not familiar with this scenario from a private individuals perspective but from a commercial perspective there would normally be a "gross up" clause included in a contract. In this case you would pay the full amount of rent quoted without any deductions for taxes, charges etc. Without a gross up clause you would "withhold" the amounts due on tax therefore in this case paying 80% to Landlord and 20% to Revenue. You would have to have a lot more information on the landlord's residency and domicile to make such a call though I would imagine.
Chat to the LL before you go any further. Overseas landlords do have an option of nominating an agent here to look after their tax. It can be a letting agent but it can also be a relative. That way you pay the rent as normal and he and the agent sort the tax, it's perfectly legit. I know a few people who do it.
Thanks a million for that Miranda, thats really helpful...must talk to the LL