Business Irish

Wednesday 26 June 2019

Revenue loses help-to-buy 'photo' appeal

Woman denied tax relief based on photographic evidence, wins case

'At the hearing, Revenue officials accepted they had not seen the interior of the building and did not know what condition it was in. ' (stock image)
'At the hearing, Revenue officials accepted they had not seen the interior of the building and did not know what condition it was in. ' (stock image)
Samantha McCaughren

Samantha McCaughren

A Revenue Commissioners decision to turn down a woman's application for the help-to-buy (HTB) scheme based on a photograph taken more than 150m away from the property has been overturned by the Tax Appeals Commission (TAC).

The case centred on a decision by Revenue to refuse to grant the woman status as a first-time buyer, which meant she could not qualify for the scheme. Under the incentive, first-time buyers can claim income tax relief.

According to the ruling, the woman bought land beside her parents' home in 2016 with a view to building a home for herself, husband and son. There was a derelict pre-existing farmhouse on the land which was demolished. The woman claimed HTB relief for the new build in 2017. She claimed that the farmhouse had not been lived in since 2013 and provided an architect's report on the condition of the building.

However, Revenue refused to grant relief under the scheme on the basis that the farmhouse had been on the land, which it believed meant she had previously bought a dwelling on the land.

In evidence to the TAC, the woman provided the architect's report which said there were large cracks on the external walls and the internal walls were collapsing. There was dampness throughout the building as well as other issues. The report states that "the structural integrity of the dwelling was clearly compromised".

After consultation with the local authority "it became clear" that the only viable option was to demolish the house.

The commission was told that Revenue relied on "photographs of the farmhouse, taken at a distance of approximately 150m and 250m respectively" to support its view that the farmhouse was suitable for use as a home.

At the hearing, Revenue officials accepted they had not seen the interior of the building and did not know what condition it was in. "The respondent relied exclusively on the photographs in support of its submission that the pre-existing farmhouse was suitable for use as a dwelling," said the determination.

Commissioner Lorna Gallagher noted Revenue submitted that a purchase price of €460,000 included €160,000 for the farmhouse and €300,000 for the land and that if the farmhouse had been in a true state of dereliction it would not have commanded such an amount. The woman accepted she had paid over the odds but gave a number of reasons for this.

Gallagher did not accept that the consideration paid for the farmhouse was a reliable measure of its state of dereliction. She concluded that the farmhouse was not suitable for dwelling and said that Revenue did not carry out an inspection or furnish an architect's or engineer's report.

She therefore determined the woman is entitled to avail of the help-to-buy scheme.

Sunday Indo Business

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