Tuesday 17 January 2017

Huge tax windfall expected from landlords due to higher rents

Published 29/09/2016 | 02:30

Rents are at an all-time high, while there are some 170,000 landlords registered with the State’s Rental Tenancies Board. Photo by Christopher Furlong/Getty Images
Rents are at an all-time high, while there are some 170,000 landlords registered with the State’s Rental Tenancies Board. Photo by Christopher Furlong/Getty Images

Landlords are expected to have to pay a huge amount of extra tax this year, due to the sharp rise in rents.

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And the surge in the number of people renting out their homes as part of the online property rental service Airbnb will also boost tax revenues.

Rents are at an all-time high, while there are some 170,000 landlords registered with the State's Rental Tenancies Board.

Tax experts said high rents and the large number of landlords was likely to lead to a windfall for the Revenue Commissioners.

Some 400,000 people are expected to file a tax return in the next few weeks. This is made up of the self-employed, and pay-as-you-earn taxpayers with extra income like rents.

Senior tax manager at Taxback.com Barry Flanagan said: "Due to soaring rents in many parts of the country, the amount of tax owed by landlords will increase this year resulting in a Revenue windfall of sorts."

Average rents have shot up by a third, since bottoming out in 2011, and are now higher than the peak they reached in 2008, according to recent Daft.ie figures.

Monthly rents are now 10pc higher than they were a year ago.

Rents in Cork, Dublin and Galway have risen particularly strongly.

"Landlords in these counties will almost certainly see an increase in their tax bill this year," Mr Flanagan said.

He said the landlord group is comprised of professionals and what he called those who "simply jumped on the buy-to-let bandwagon during the boom".

This means knowledge among landlords about tax-filing obligations varies hugely.

Mr Flanagan warned: "Rental income from the letting of a property situated in the Republic is chargeable to tax, regardless of whether the owner is resident in Ireland or not."

Irish Independent

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