Home Economics... Answering your property questions
Our property expert answers questions about single debit authority for Local Property Tax for parents taken aback by the cost of rent for their first-time college student.
Question: I have received a letter from Revenue demanding my Local Property Tax. I set up a direct debit in 2014 to have it taken out in one lump sum, and it was, but I've checked my records and it doesn't appear to have gone out this year. I am self-employed and this is going to impact on my tax clearance certificate. It is over €800, although less than last year, but quite significant.
Sinead replies: The problem here is that you understood, not unreasonably, that a direct debit would automatically roll over to subsequent years; this is not the case. Anyone who paid their LPT by single debit authority last year (along with those who paid by debit or credit card) received a letter regarding payment for 2015 late last year - being self-employed you may have missed this as it would go into your ROS inbox.
It was to give those the opportunity to change their payment method or confirm the single debit authority for 2015. If you didn't do this, you are now in arrears, hence the correspondence. The only people who won't get a reminder are those who are being deducted via salary or social welfare.
The payment was due to be extracted on 21 March, so that deadline is now passed and you need to urgently address the situation because without the LPT payment, you are quite correct about the tax clearance cert being held up. In terms of the lesser figure, you appear to be in one of the 13 local authorities whose rates dropped this year. Please call 1890 200 255 to make the payment and furnish your accountant with the evidence.
Question: Our son has just completed his Leaving Cert and hopefully, will get the college course he wants in Dublin. We live in Westmeath, and were taken aback by the rent being sought for even basic flats. I am trying to find out what grants may be available if he were to find somewhere affordable - we wouldn't have a huge income. He obviously cannot commute and we really hadn't expected to pay so much.
Sinead replies: There are a few things to consider here. The first is the type of property your son requires. He can, of course, rent an apartment or part of a house, but with average rent currently at €1,360p.m. for a two-bed in the city, it's not cheap. He could consider campus accommodation for the main universities - all offer this to distance students in first year, but this is usually provided on a first come, first served basis.
The other option is 'digs' - i.e. a room in a house where meals are provided on a five-day basis. This may not appeal to an independent student, but it is less expensive and may give you peace of mind for Year One. GetDigs.ie and CollegeCribs.ie are two websites to look at.
In terms of grants, the SUSI scheme may well be of benefit. Maintenance and fee grants are offered on a means-tested basis, but these are quite generous, so it's worth applying. Try studentfinance.ie for information. It will be your son applying, and not you, so all relevant information will obviously have to be his.
The Ryan review
For most of us mortals approaching our bank for a loan, we can see the interest rates we're going to be charged upfront. They'll be published in the newspapers, or on the bank's website, and we will know exactly what we'll be paying. We'll be told if it's a variable or fixed rate and the term, and to more or less take it or leave it. It's easy to believe it's this way for everyone, but you'd be mistaken.
For what the banks term 'high net worth individuals' and companies, the rules are different. Using their borrowing power they can usually do deals the rest of us cannot. So often their 'interest rate' is not something set in stone at the bank counter and is a flexible type of arrangement, subject to negotiation.
So, it really shouldn't come as any surprise that some, especially those borrowing enormous sums that would make our eyes water, are treated more favourably than the great unwashed. After all, the asset they're bringing to the bank's loan book is substantially higher than ours. Yes, there are risks involved, but thems the way the cards fall and it was ever thus.
However, ordinary borrowers can also sometimes negotiate on interest, if they really want to. Nothing is more likely to make a bank uncover a more flexible attitude to selling money then thinking they're going to lose it.
If you are a mortgage-holder with equity (at least 80pc but 50pc is better), with a nice house in a good location and what your mother would call "prospects", you're in a stronger position by threatening to switch your loan to another bank. It can be a game of chicken, but if you're prepared to follow through you can get your own bank to match or better another's advertised offer (even if it's 'off-book') and save yourself legal fees and long-term interest.