Revenue authority in estate agent ‘blitz’ queried

CONFIRMATION was still awaited last night as to whether the Revenue Commissioners acted within their powers when they ‘blitzed’ estate agents’ offices and took away lists of clients who had purchased properties overseas.

The news comes after Revenue announced on Tuesday that they intended to investigate people who bought properties abroad. This will check that:

Tax was paid on money used to purchase any properties.

Tax was/is being paid on any rental income earned from letting out properties.

Capital gains tax has been paid on any foreign properties sold.

The Revenue's Offshore Assets Group (OAG) will use information they retrieved from a 'raid' on the offices of estate agents more than a year ago.

However, the operation resulted in a confrontation with some estate agents who refused to hand over their client lists, said their representative group, the Irish Auctioneers and Valuers Institute (IAVI).

"We took advice from our tax advisers and we were given the view Revenue may have exceeded its powers," said IAVI chief executive Alan Cooke.

"Revenue went in effectively unannounced and essentially wanted all files opened up. We were advised they didn't have the power under the revenue acts to do so."

Mr Cooke said estate agents were concerned that if they gave over information to Revenue, and Revenue was not authorised to receive such information, the agents could find themselves liable to an action for breach of confidentiality.

He said meetings were held with Revenue officials, but these were inconclusive.

He said last month he wrote to a senior Revenue official seeking clarification on their powers and assurances that no future operations would be carried out in the same manner.

A Revenue spokesman confirmed some estate agents questioned the Revenue's authority and corresponded with them.

He said the issue was resolved as the preliminary probe had been 'parked' until the OAG finished its probe into offshore accounts, due to be completed by the end of 2005.

The Revenue spokesman said its investigation would focus on Spain and France as there had been significant property transactions by Irish people there. He said they were encouraging people to make a voluntary disclosure.

"We're looking at the source of the money, whether it was taxed, the rental income, whether that has been returned and whether there is a capital gains tax liability."

The investigation will focus on all property including residential and businesses.

Many Irish criminals have bought houses, apartments and pubs on the Costa del Sol in recent years.