Q&A:Your property questions answered
Q Having engaged a conservatory company to erect a unit at the rear of my main and only dwelling for which I obtained a mortgage of €20,000, I decided to make other improvements to my home, e.g. fitted kitchen, tiled floors, new style doors. I paid for these improvements to my main dwelling from my own personal funds. Can I claim tax relief on the expenditure involved in these improvements? Receipts will be provided. The work was carried out in 2006 which leaves little time to claim within the four-year rule?
A As tax matters are thorny we got onto an expert for this one and according to Cait Monagher at Deloitte, the answer is no, it is not possible to claim any tax relief for the improvements that you have carried out on your own home, as these were paid out of your own personal funds. Tax relief is however available on the interest on borrowings used for the purchase, repair, development and improvement of your home. The tax relief is given at source, so that you pay the net amount after tax relief. From May 1st, 2009, the number of years that both first-time and non first-time buyers can claim tax relief is seven years. You should therefore be entitled to interest relief on the interest paid (subject to certain limits) on the mortgage of €20,000 taken out in 2006 used to erect the unit at the rear of your home. The interest relief available will depend on you being either a first-time/non first-time buyer. She suggests you contact your own tax office who will be able to advise you on your particular entitlements, and a local architect through www.riai.ie.
We have a granny flat – but no granny. Must we pay tax?
Q Some years ago we converted our garage to a self-contained granny flat. Granny has now passed on and the flat was rented for some time, though it has been vacant for the past month. It is my understanding that granny flats are not subject to the new NPPR tax so I don’t have to pay. I am getting conflicting information.
A Who knew the slightly peculiar name “granny flat” would find itself the subject of such confusion. Basically, your garage conversion ceased to be a granny flat when granny – or indeed any other family member – ceased to live there rent-free and as their principal private residence. The “granny flat” rule is a humane clause in the NPPR tax rules, in that there is an understanding that some people need, for a variety of reasons, to provide free accommodation for a dependent relative and they should not be penalised for their generosity by the imposition of another tax. You are not in that situation and you appear not to have a granny flat but a self-contained rental and as such have to pay. But be quick, you only have a few days. After November 1st, a penalty of €20 per month starts clocking up for late payers. Pay via www.nppr.ie.
Your questions
Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. This column is a readers’ service and is not intended to replace professional advice.
