Irish revenue net ‘closing’ on Derry landlords

Downings in Co. Donegal.

Downings in Co. Donegal.

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The net is closing on Derry landlords who fail to pay tax on rental incomes from their properties in Donegal.

A large number of non-resident landlords from Derry have already received tax bills running into thousands of euro from the Office of the Revenue Commissioners, according to Letterkenny-based financial and taxation experts.

Pascal Curran, from Advice First Financial, and Tax Consultant Mary Farrell, of Tax Advice Services, say they are dealing with a steady flow of cases involving Northern Ireland-based Donegal property owners who are faced with hefty tax bills.

Many others are in the pipeline as a result of an unpaid tax recovery drive in the county.

The Donegal pilot project identifies landlords - by correlating information from a variety of sources – and then targets those not paying tax on rental incomes, Mr Curran explained.

He added that many of the landlords being “chased” for tax arrears were not aware of the requirement.

“In our recent experience, most non-resident landlords don’t know this is a requirement until the demand for payment comes through their letter box,” he said. “These demands can also include interest and penalties and can run into many thousands of euro.

“An issue we’ve encountered is that agents acting for the non-resident landlords are not making their clients aware of the requirement. I have a client from Northern Ireland who has 24 rental properties in Letterkenny but was not made aware by his agent that tax was payable on his rental income in the Republic. He believed that, because he paid his income tax in the North, he was covered but, unfortunately, that was not the case as Revenue in the Republic must get a first bite of the cherry.”

Tax Consultant Mary Farrell says she currently has 14 live cases involving substantial sums of taxation arrears for non-resident landlords living in Derry and throughout Northern Ireland and Britain.

She said: “Many of the cases I’ve worked on involve second homes owned by non-resident landlords who, for various reasons, ended up letting them. Arrears are being sought for six, eight and even ten years at an approximate cost of 1,500-2000 euro per year.”