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Monday 9 December 2019

Home economics: Sinead Ryan answers your property questions senior tax manager Barry Flanagan senior tax manager Barry Flanagan
Sinead Ryan

Sinead Ryan

My employer has agreed to a relocation allowance of €500 pm when I move to a new job in Dublin (from Mayo) to help cover moving costs and higher rent. How is the amount treated for tax? Can I just put it toward rent and not pay tax on it - I'm told it will be shown in my pay slip? I won't personally benefit, as I'm moving from one flat to another.

A. Congratulations on the new job. Employer funded contributions are always a tricky area, and Revenue is very sticky on what is, and is not, treated as taxable income. I asked Barry Flanagan, Tax Director with for his expert opinion.

He said, "For employees relocated within Ireland by an employer, the employer may pay an employee's expenses for removal and relocation, tax-free, if the following four criteria are met:

(a) there are actual removal and relocation expenses,

(b) they are for a reasonable amount,

(c ) the payment of the expenses is properly controlled, and crucially,

(d) moving house is necessary.

In addition, an employer may pay a temporary subsistence allowance while the employee looks for accommodation in the new location. This payment is for a maximum of 10 nights, at rates that do not exceed current Civil Service rates. This payment does not need to be vouched by receipts.

They may also pay rent for temporary accommodation for a period of not more than three months (but not at the same time as the rate above)".

In terms of the logistics, he adds: "Usually, allowances paid via payroll (as opposed to reimbursements for vouched expenses), are taxable, so it may be worth considering the mechanism through which this payment will be made. Any payment made either in advance or in excess of the above, while very welcome, would be taxable. Reasonable reimbursements made in line with the above may qualify for relief."

Q. Our landlord has given us notice to quit by letter. He says he is giving the flat to his son who needs to move nearer his place of work. However, through a circuitous connection, I've found out his son is actually moving to the UK, and I suspect the flat is going to be re-let at a higher price as we are in a rent-pressure zone. We suspect we are paying slightly below market value but I thought we had rent certainty. What can I do?

A. I am hearing a lot of anecdotal evidence of this kind of thing going on, as some landlords seek to circumvent the rent controls in place. However, the law is quite clear on your rights. According to housing agency Threshold, where a lease agreement exists notice normally cannot be given to you unless you are in breach of your obligations as a tenant, there is a break clause, or both you and the landlord agree to end the tenancy.

Firstly, a notice of termination of tenancy must be in writing (email, text or verbal notice is not valid under the law).

Notice may be issued in a number of ways including personal delivery, leaving it at the address where the person ordinarily resides, by post or by affixing to the dwelling.

While this appears to have been met in your case, there is a separate ruling under the Act which states the landlord must provide a signed statutory declaration if they require the property back for their own or a family member's use.

If for a family member, the notice must identify the person and their relationship to the landlord and the expected duration of the occupation. It must also inform you that should the property become available to rent again within six months then, providing you keep the landlord updated with your contact details, you are offered the tenancy back.

I suggest you contact either Threshold or the Residential Tenancies Board for assistance. Bear in mind, it may be a different son, or your source is incorrect. Best to line up your ducks first on this one.

The Ryan review

Amid the flurry of positive press releases flowing from banks these days (as they continue to wheel out the reluctant mea culpas regarding trackers), an interesting spin has emerged.

Both AIB and Bank of Ireland have announced a push toward developer lending for new housing.

In the former's case it is dull-but-worthy social housing that's getting the nod for €100m funding at favourable terms as it seeks to tick a box on its social contract while Bank of Ireland is pumping a sizable €1bn to property developers to pick up shovels and move off hoarded land. If they want it, that is.

This is all lovely, and maybe some houses will get built in the next few years, but sending out 'good news stories' about banks lending is a bit like explaining what coal looks like in Newcastle or tea in China.

It's what they're supposed to be doing, isn't it? The lenders are back in the black, with little or no tax to pay for a couple of decades and remaining bits to sell off. Lending is the very least they should be doing to smarten up their bibs.

After all, it's a lot sexier than redress payments to tracker victims.

But the more than 28,000 people over-charged and messed about for years by the pillar pair must wonder how 'billuns and billuns' can suddenly be found to bankroll builders while they are still waiting for the refunds trousered from their accounts.

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