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Dan White: I bought my new house a few weeks before old one was sold - must I pay second home tax?

Dan White answers your financial questions

I am currently in the process of moving house. My old house took longer to sell than expected and a very good property came up for sale while I was waiting for the sale to close.

Between the jigs and the reels, I 'owned', or rather my bank did, two houses for a couple of weeks. Now I have been told that I am liable for the second homes tax. Is this true?

Paul

Under the rules governing the second homes tax a person can only have one principal private residence on the date the tax falls due, June 30. This means that if Paul's period of dual home-ownership included June 30 then he is technically liable for the second homes tax.

In fact, by not paying the second homes charge in time Paul could be liable for the late payment penalty.

This is €20 for every month or part of month that the tax remains unpaid.

While there is a month's period of grace after the June 30 deadline, now that we are into August, Paul may have to hand over another €20.

That's the bad news. The good news is that Paul can apply for a refund if the second property was bought no more than 12 months before the June 30 deadline, ie on or after July 1, 2009, and the first property is sold within six months of the deadline, ie by December 31, 2010.

As the second home tax is payable to the local authority in which the second home is located, Paul will have to apply for a refund to that local authority rather than to the Revenue Commissioners as is the case with most tax refunds.

He should write to the local authority explaining his reasons for seeking a refund. It would be a good idea to include any relevant documentation, particularly the receipt showing that he actually paid the tax, with his refund application.

I have recently inherited some money and am looking for a safe place to deposit it.

After all that has gone on at the Irish banks in recent years, is my money safe with them?

What will happen to my money when the Government's deposit guarantee expires later this year?

Aine

When the government originally introduced the unlimited deposit guarantee in September 2008 it was supposed to expire at the end of September this year, that's now in less than two months time. However, as concern has mounted about the ability of the Irish banks to retain deposits in the absence of the unlimited guarantee, Finance Minister Brian Lenihan was recently forced to announce an extension of the deposit guarantee until the end of this year. Even if the Government does scrap the unlimited deposit guarantee at the end of the year, all deposits up to €100,000 will still be guaranteed by the Government.

If Aine is worried about the safety of her money and has more than €100,000 to deposit, it might be a good idea to split it up into separate amounts of less than €100,000 each and distribute it among a number of different banks.

So long as each deposit is for less than €100,000, her money is still guaranteed by the Government. Even better, the €100,000 deposit guarantee applies to money deposited with all banks based in Ireland, including foreign-owned banks.

This is unlike the unlimited deposit guarantee, which only covers Irish-owned banks. This means that Aine or anyone else who keeps individual deposits under €100,000 has much greater choice in deciding where to put their money.


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