Landlords hoping to reduce their tax bill this October will need to ensure they have registered their properties, as the Revenue again increases its oversight of those earning rental income.
And for those letting out properties via HAP (housing assistance payment) tenants, there will be no room to hide earnings, as Revenue has prepopulated this year’s tax forms with data on rents shared by local authorities.
The move comes as landlords and other self-employed earners start to prepare their annual Form 11 tax returns, which must be filed – and paid – in paper by October 31st or online via the Ros service by November 12th.
In order to claim a deduction on interest paid on a mortgage on a rental property (offered at 85 per cent for 2018 and 100 per cent for 2019), which can be used to defray tax owed on rental income, landlords must have the relevant property registered with the Residential Tenancies Board (RTB). Until now, the Revenue did not seek confirmation of this, although the RTB did share information with the tax collection agency. In this year’s Form 11 tax return form, however, the Revenue has moved up a gear by prepopulating whether or not a landlord has registered with the RTB on the form. And if you are not registered, you should not be claiming the interest relief deduction.
Prepopulated tax forms
A Revenue spokesman said the agency had prepopulated information into tax returns since 2011, “to assist taxpayers to meet their filing obligations”.
“This makes it easier for taxpayers to complete tax returns, minimises the scope for errors and omissions, reduces the need to contact us directly and speeds up the process of filing a tax return,” Revenue said.
Of course it also makes it more difficult for filers to try to downplay the amount of income they have earned, and therefore the amount of tax they owe, as it will be already clear exactly what information Revenue has collected itself.
This is particularly true when it comes to the sharing of information from the Housing Assistance Programme (HAP). Up until this year, landlords were required to disclose these payments themselves.
Now however, the Revenue has sought to prepopulate income earned via HAP, or the associated rental accommodation scheme (RAS) and the social housing leasing initiative (SHLI), on a landlord’s Form 11, thus clearly illustrating the scope of the data it has already captured on your rental income earnings.
In some cases, however, you might find that you will still be required to fill in the information yourself.
“It was not possible to prepopulate scheme payments for all relevant customers,” the Revenue said.
The Revenue has also expanded its range of questions on domicile/residency in the Form 11 for 2018, and filers must now indicate whether they are resident/non-resident; ordinarily resident/not ordinarily resident; and domiciled or not domiciled. Additionally, all filers must enter a country of nationality from a dropdown list of nationalities.
Farmers are also being requested to provide further information, including data on stock relief claimed under section 667B.