Holiday home owners and landlords pay up €23m in tax amnesty
Published 25/08/2014 | 02:30
LANDLORDS and holiday property owners have paid over €23m in the second-home tax amnesty which runs out this week.
The tax bill will almost double to more than €7,000 next week for anyone who fails to avail of the final warning
Although the exact numbers who paid out is unclear, up to 10,000 property owners are believed to have settled up during the so-called grace period over the past six months.
However, Reform Alliance TD Billy Timmins is calling for the time to be extended as he said some property owners had been unaware of the tax and were trying to settle the debt.
Environment Minister Alan Kelly's officials are ruling out any extension.
Councils are responsible for collecting the tax. But second-home owners are being warned the property tax database is being used to track down those evading the charge.
The Non-Principal Private Residence tax was brought in five years ago as a way to raise funds during the economic crisis. The charge was effective from 2009 to 2013 and has since been replaced by the property tax. Over its lifetime, the NPPR brought in €400m.
The charge was a flat rate of €200 a year. But the bill increased with penalties for those who avoided paying the tax.
The owner of a property that was liable for the tax for the full five years from 2009 to 2013 now owes €4,220. But from September 1, the charge will dramatically increase to €7,230.
The amount collected during the amnesty period stands at €22.7m. The number of houses liable for the tax varies as not everyone would owe the bill for all five years.
So far, there have been 31,000 individual settlements but there has also been much duplication as lots of people making settlements would do so for a number of years.
During the grace period, the charge had to paid for 5,000 properties owned in 2009, but it was nearly 10,000 for 2013.
The average number of properties liable for the charge across the five years was 6,250. As a result, the average payment was €725, made up of the original €200 for the original charge each year plus penalties.
Mr Timmins said there should be an extension of the deadline to allow property owners who want to settle their debt.
"Despite what officials may think, people didn't know about this charge," he said.
The Wicklow TD also said councils needed to show discretion to allow people pay the bill in instalments.
"There seems to be a complete lack of empathy," he said.
The Department of the Environment is ruling out any extension. Local authorities have access to the Revenue Commissioners' local property tax database, which shows precisely who owns every house in the country. Councils are also contacting property owners inside and outside the country about possible liabilities.
However, there is also an issue around what are known as 'accidental landlords', homeowners who bought properties and then because of difficulties with meeting mortgage repayments decided to let the property and move back home.