Last year of NPPR before it is abolished and LPT is doubled
This is the final year of the €200 Non Principal Private Residence tax (NPPR), originally introduced in 2009.
The NPPR, as its name suggests, applies to residences only, and to those residences which are not occupied by the owner as their principal private residence.
The charge was wrongly christened the second home tax, which can be misleading.
It usually applies to persons who own multiple properties such as a second home or rental property, but it can also apply to persons who own just one property, but where that property is not their principal private residence.
For example, a person who owns an Irish property previously occupied as their principal private residence, where that person has now emigrated.
The NPPR Charge only applies to residential property located in Ireland.
Foreign properties are ignored for the purposes of the charge.
In defining residences, the NPPR legislation covers all “dwellings”, including houses, bed-sits and apartments, suitable for habitation — whether occupied or not.
Some local authorities require an engineer’s certificate together with a sworn statement, wherever an owner insists that a second property is unfit for occupation.
The following persons and properties are exempt from the charge.
* Principal private residences (PPRs).
* PPRs which generate rental income under the Revenue Commissioners’ Rent-a-Room Scheme.
* Residential property owned by certain charities or comprised in a discretionary trust.
* Where a person is moving house and, in the process, owns two houses for a relatively short period.
* Joint ownership of a property after a divorce or separation agreement, where the second residence becomes the primary residence of one party.
* Where a person who owns a principal private residence vacates the dwelling in question because he or she is long-term incapacitated as a result of physical or mental illness.
* Where a residence is occupied rent-free by a relative of the owner, and the owner resides on the same property or within two kilometres of the residence in question (this could include a granny flat).
For the current year, the NPPR is based on property ownership on March 31, 2013.
If you are liable for the charge, it must be paid by June 30, 2013.
The penalties for non-filing are severe, mounting up rather quickly at €20 per month on top of each individual year’s late return. For example, a single liable property that has never been registered would now have a liability of €3,320, when 2009 to 2013 NPPR charges and penalties are added up.
The NPPR return can be filed and payment made online at the www.NPPR.ie website.
From next year on, the Local Property Tax is doubled to coincide with the abolition of the NPPR.
For 2014, the Local Property Tax will be payable on January 1, 2014, based on property ownership at November 1, 2013.
As it stands currently, from Revenue’s perspective, neither the NPPR nor the LPT are tax deductible expenses for rental income.
However, there is some hope that the LPT will become tax-deductible in future years, on a phased basis.
* Registered tax consultant Kieran Coughlan, Belgooly, Co Cork (086-8678296)
www.coughlanaccounting.com
