Home economics: Answering your property questions
Answers to questions on a leaking chimney in a neighbours house and the tax implications of letting a spare bedroom to Airbnb.
Questions: My next door neighbour's rented house has a chimney leaking water/soot down walls of our house and across the landing ceiling. There are about half a dozen 'streaks' of black stain. The property is end of terrace and he thinks the chimney needs to be stripped down and rebuilt. However, the chimney is not shared, and there appears to be cracks in it. Several of the chutes have been capped with concrete to try to solve the problem in this 1930s house. My question is who is responsible for the chimney rebuild or for any other repair work that needs to be done?
Sinead replies: This is made easier by the fact the chimney is solely on your neighbour's house. If it was on a boundary or it was shared, the situation would be different and it's worth being absolutely certain this is the case, says Susan Cosgrove of Cosgrove Gaynard Solicitors.
"In that event, it is the sole responsibility of your neighbour to repair this and to prevent any more damage to your property. The fact it is rented does not affect his obligations in this regard. If he refuses to do so you can take action to force these repairs but I would strongly recommend trying to resolve this with him directly and using legal action as a last resort. It would be worth getting a surveyor out to confirm the chimney as the source of the problem.
"It is possible there is something that also needs to be repaired on your own property as there should be not be that level of water ingress. Again your surveyor will confirm this. It may be that this damage all stems from the chimney but this does need to be verified."
Question: I've used my spare bedroom as a letting on Airbnb for over a year as a handy way of making a few bob. I understood this to be tax free under the rent a room (RAR) scheme, but have now received a letter from the company saying they're passing on my details to the Revenue Commissioners. Can they do this?
Sinead replies: Yes indeed, they can and they have been compelled to do so in order for Revenue to see the earnings people are making via lettings on Airbnb, which is not tax free and does not qualify for the Rent a Room scheme. Although all earned income is taxable, some people like yourself assumed that the RAR scheme allowed them earn up to €12,000 p.a. without paying tax on it. In a guidance note issued earlier this year, Revenue made a distinction between 'residential' accommodation, i.e. renting the room to say a student for a nine month academic year, and short term 'guest letting' stints which is what Airbnb and similar sites are.
In order to see what's owed to them, they have instructed Airbnb to hand over records of all bookings and will seek to back tax hosts based on this information. They are also going after foreign rentals in the trawl which dates to May 1, 2014. However, Revenue is perfectly entitled to back date further than this if it chooses to do so.
In your own case, you may well be faced with a bill. If you believe it will be substantial, I'd get in touch with an accountant to do the leg work for you.
For the future, you can continue with Airbnb, knowing that full tax (income, USC etc) will be payable, although you may be able to offset some maintenance payments against this, or consider letting under the RAR scheme to say, a student instead.
The Ryan review
Like many ideas which seemed like they were for the greater good at the time, the ban on bedsits didn't help the housing crisis one bit.
Although many tenants were perfectly happy residing in cheap, compact accommodation, they ended up being turfed out.
It was supposed to act as a fillip to get large old Victorian or Georgian city rental property stock upgraded, but shortage of credit and the sheer overwhelming nature of the conversion work involved (many are listed buildings), meant many owners didn't bother and the properties have simply just lain vacant instead, which is both unedifying and inefficient.
At the same time, developers will tell you they simply can't turn a buck on Dublin apartments where costs are 25pc higher for land, not to mention VAT and construction. Stiff space and building requirements make it difficult to sell to the market which needs them: the first time buyer, himself/herself now restricted to paying €220,000 if they want an affordable mortgage.
So, new proposals by Dublin City Council to reduce the minimum size of new 'studio' apartments to 45 sqm are welcome. At 20pc smaller than the existing limit, they'll be 'bijou' at best, but with the majority on the housing lists being one-person households, it should be just dandy. The Council is also proposing to reduce the 'dual aspect' requirement from 85pc to 50pc, reducing construction costs.
Both are positive measures, but some of those bedsits are also okay.