Q&A

Your property questions answered.

Your property questions answered.

If I reduce rent, will others want the same?

Q I own three investment properties (apartments) and one of the tenants - a couple with one child - have contacted me to say that social welfare has reduced their rent allowance by 8 per cent and asked for an 8 per cent reduction in rent. The other apartments are rented to private tenants.

These tenants were private tenants until last year when they lost their jobs and I agreed to accept rent allowance. The apartments are the same and I have successfully charged the same rents for all three.

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If I reduce the rent for one (which I do not want to do as there are mortgages on all three) then surely I will end up reducing rent on all the others. It seems as if I am being forced into a situation by the department of social welfare.

ANew rules regarding rent allowance came into effect on June 1st. There are three elements involved: an increase in the minimum contribution tenants have to make from €18 to €24 per week; an 8 per cent reduction in the amount of rent supplement they receive; and the maximum amount of rent for which a supplement can be paid is being reduced so, for example, in the case of your tenants, a couple with one child in Dublin, the maximum is €930.

Recipients of rent allowance are being encouraged to negotiate their rent downwards which is what your tenants, reasonably given their situation, are doing. You can say no. You presumably have a lease which is a contract - and the tenants must fulfil this or risk losing their deposit.

However, the reality is that rents are falling anyway on the majority of Dublin apartments and it's highly likely that, once their leases are up, your other tenants will be coming to you to try to get a reduction too. You clearly have these tenants for some time, they are obviously "good" tenants or you wouldn't have been happy to change over to rent allowance payments when they got into difficulty last year, so a void period, even of just one month, is probably going to be more expensive than allowing an 8 per cent reduction for the remainder of their lease. You just have to weigh up your options.

Do I get a tax refund if I buy in Spain?

Q I bought a property in Spain three years ago. I read somewhere (but can't find the clipping!) that foreign buyers are now entitled to a tax refund. Do you know anything about this?

AThe tax refund relates to Capital Gains Tax (CGT) paid by EU citizens who sold property in Spain between 2004 and 2006 and who paid CGT at a rate of 35 per cent. At the time the rate for locals was 15 per cent.

An EU ruling found that the discrepancy in rates charged to locals and foreigners was illegal, hence the opportunity for sellers to go back now and seek a refund. It's thought that many Irish sellers could be entitled to the refund and it's estimated that the average refund will be in the region of €20,000.

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.