Revenue set to target rental income

THOUSANDS of landlords could face fines or other penalties as Revenue Commissioners clamp down on undeclared rental income.

Tax inspectors have begun calling to houses and apartments in Letterkenny, Co Donegal, in recent weeks, seeking information on the identity of landlords and how much rent is being paid. A Revenue spokesperson confirmed yesterday that mobile service personnel were examining the issue of undeclared rental income in the northwest as a result of an initiative by local officials in the Donegal tax district.

Although the Revenue spokesperson said the operation could be extended to other parts of the country in the future, he stressed that there were no current plans to conduct a similar operation on a national basis.

Revenue chairperson Josephine Feehily recently told a Dáil committee that the tax authorities were focusing on developing a system of risk-profiling to identify landlords who were not declaring rental income.

It is understood Revenue officials believe such a targeted approach is more effective than conducting random audits on landlords in a particular geographical area.

Ms Feehily also revealed that about 103,000 landlords declared receipts of rental income totalling €3.56 billion in 2006. The Revenue chairperson explained that tax officials use a combination of information including stamp duty returns, tax credits and data from the Department of Social and Family affairs to try and match declared returns from landlords. Ms Feehily is also seeking powers for Revenue to access information generally from the Private Residential Tenancies Board (PRTB) as under existing legislation it can only obtain data from the PRTB on a case by case basis. An audit last year by tax inspectors of 500 people who claimed their main business was letting property in 2006 resulted in a €4.7m payment in tax, interest and penalties.