Spanish holiday home of little interest to Revenue
Q&A: Dominic Coyle answers your personal finance questions
Spanish holiday home: If you earn no income from the property, there is no tax issue. And the issue of a capital gain will only arise when you eventually sell it on.
I have a holiday home in Spain that I have not declared yet to Revenue here in Ireland. There is no income from same and only a current bank account to deal with bills for it. Is it necessary to declare this now and will there be a wealth tax imposed?
I pay all relevant taxes for the property in Spain already. I telephoned the Revenue at the time of purchase but they had no interest in it at that time except in the event of selling it.
Ms EW, email
There was a lot of fuss recently about making declarations to the Revenue in relation to income and assets overseas. The Revenue, which are now in receipt of much more information from the likes of the Spanish tax authorities and others, announced a crackdown. They said people disclosing retrospective foreign earnings and capital gains after a certain date – May 4th last – would no longer get the benefit of lower penalties for approaching Revenue proactively to settle their affairs. Instead they would be considered as having deliberately evaded tax and would be penalised as such.
The good news for you, however, is that you have nothing to worry about – assuming that the money you used to buy the holiday home in the first place came from money that had already been taxed and/or declared.
You earn no income from the property, so there is no tax issue there. And the issue of a capital gain will only arise when you eventually sell it on. Hence their telling you back when you called them at the time of purchase that their only interest was when you went to sell it.
The only possible issue of interest to the tax authorities here is the bank account but, only if it is earning interest. From your description, that seems unlikely and the sums involved sound modest.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice