The ‘Sharp Focus’ of Revenue for Landlords

Dr. David Duffy, Head of Property Industry Ireland (formerly of the ESRI) addressed an industry event recently and spoke of the importance of the private or ‘small’ landlord in Ireland. He quoted PRTB figures, which show that 90% of landlords in Ireland own fewer than two properties each, suggesting that there is still a massive gap between the institutional investor and the private property investor in this country. This is something that we have spoken about before in the context of the unfair taxation rules for private investors.PRTB figures confirm that there are approximately 174,000 landlords across the country, with 340,000 registered tenancies.

Given the current rental crisis, that is by no means restricted to urban centres, it was surprising to see so little done in the recent Budget. This is on our minds as the October 31st tax filing deadline approaches (Revenue ROS online filing deadline is November 14th).

An interesting and potentially concerning report from TaxBack.com this week suggests that self-assessed tax payers today receive “greater attention” from Revenue than they might have done in recent years.  In fact, the tax authority’s annual report named the private rented sector amongst the five sectors that has received “sharper focus” in relation to compliance activity.

Even the language used is quite adversarial and does little to encourage investors back in to this market. It is generally accepted that we need private landlords to return to the marketplace but there is little to entice them, with increasingly onerous regulation and burdensome taxation policies. It simply does not make sense that private landlords pay different rates of tax when compared with institutional landlords. On the other side of this, we absolutely need a more professional approach to letting and managing property. Technology can certainly help to keep amateur landlords compliant once there is an appetite for that compliance. Also, it has always been important for landlords to educate themselves and stay informed about the market, consumer demands, competition and the regulatory environment. This will continue to be important and become even more so.

On the positive side, soaring rental returns have made it viable for private landlords to adopt a more professional approach. One of the best tips we read in the Taxback report is that landlords need to educate themselves on ways to bring down their tax bill, including provisions for pre-letting expenses (up to €5,000 per property), rates, maintenance, insurance and professional fees.

Accurate record keeping in an important first step, followed by expert advice. The clock is ticking…

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group