Q&A: DOMINIC COYLEanswers your personal finance questions
Q We have a son aged 30 who has a disability. Five years ago, to help him to become independent, we bought a small house for him some miles away in which he now lives. He and we own the house in a three-way split so that if one of us dies the other two will own it and finally one will – in the normal course of events we would expect that person to be him.
So we own our own home and two-thirds of his. I’ve been on to the council and they don’t seem to have heard of such a situation but we think we probably are liable for two-thirds of the tax (€166) but don’t know if they will accept that. I hope you can clarify this for us! [As you will appreciate its not so much about the €166 or €200 but about the inevitable rise in the amount in the future.]
Ms PW, by e-mail
AThere has been a whole series of issues raised by readers over the precise terms of the €200 non-principal private residence (NPPR) charge, not least on the issue of granny flats.
Many of these are clearly dealt with by the well-presented www.nppr.ie website. However, a number of specific and unusual situations appear to be causing some difficulty. The Department of the Environment has been very helpful in trying to address these.
In the case above, where you, as parents, have bought a home for your disabled son of which ownership is split three ways, the department tells me there is no liability for the NPPR charge. This applies, apparently, in all cases where there is more than one owner of a property and any of them uses the property as their main residence, even where the others have separate homes.
Q Attached to my house is a granny flat with its own door, over the years used by my various family members, and the occasional let. It is now used by my extended family for short periods. No money changes hands. Is it liable to the NPPR charge?
Ms CW, by e-mail
AYes it is. Granny flats, as I stated last week, are clearly an evolving phenomenon in the Irish legislative framework. Thus, while a property within two kilometres of your home, occupied by a relative rent free as their main residence does count as a granny flat, a traditional "granny flat" – ie a dwelling attached to your own home and with its own front door – is not necessarily a granny flat unless it is occupied by a relative rent free.
In your case, although relatives stay there occasionally, it is not their main home, or principal private residence, and therefore would be subject to the charge.
Q I am the owner of a commercial property (stamp duty paid at commercial rate), namely a shop on which rates are paid naturally. My query relates to an overhead apartment which is part of the building and is a quite common feature in suburban areas. Is it subject to the NPPR tax?
Mr PL, by e-mail
AAgain the answer is yes. While the premises is subject to commercial rates, those apply only to the commercial part of the building.
The residential apartment would be liable for the charge as long as it is not your principal private residence.
Q I wonder if you could clarify what exactly is meant by the 2km rule in relation to granny flats. I think the Act states that the NPPR must be not greater than 2km from one’s principal private residence. Does this, in effect, mean up to but less than 3km, as no decimals of a kilometre are mentioned – ie 2Km and not 2.00km is stipulated?
Also, are we talking about distance measured “as the crow flies” on the relevant Ordnance Survey map?
Mr RT, Dublin
AI thought I had by this time thought of every possible conundrum in relation to the non-principal private residence charge – but clearly not!
The Department of the Environment and Local Government, which sponsored the legislation governing the NPPR charge, patiently explained that the Local Government (Charges) Act, 2009 – under which the NPPR charge is levied – states “within two kilometres”.
That means, clearly, that to qualify as a granny flat, the second home must be under two kilometres from your family home – all other criteria having been met.
I have not received a definitive response to the second part of your question so I am probably digging a hole for myself here but I would imagine you are talking about “within two kilometres” by road. Should you be in a position where you are further than two kilometres away by road but within the requisite distance “as the crow flies”, you should take the matter up with your local council.
Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2 or by e-mail to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.
Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the columns of the newspaper.
No personal correspondence will be entered into.
