NPPR

I have recently inherited a second residential property, which I have received rental income from since the start of this year. I have paid the household charge on same; however I have now been told I also have to pay a further charge of €200. Is this correct?

You are indeed correct, people who own a home inIreland that they don’t use as their main residence, are liable to the tax on Non Principal Private Residences (NPPR). The NPPR charge is an annual charge of €200 introduced by the Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011, in respect of all residential property not used as the owner’s sole or main residence. The NPPR charge applies to every residential property owned by a person which is not the principal or main residence of the owner. This includes any house, maisonette, flat, apartment or bedsit.

Certain dwellings however are exempted from the charge. The main exemption is for principal private residences. No person can have more than one sole or main residence. If you are renting a home and own another property, you are still liable for the NPPR. You don’t have to own more than one house to be liable.

However, where a person partly occupies a dwelling as his or her sole or main residence, and avails of and is entitled to the Revenue Commissioner’s Rent-a- Room Scheme, no liability for the NPPR charge will apply. Properties owned by Charities and commercial properties are also exempt. There is also an exemption for newly constructed but unsold buildings that are vacant and have never been occupied.

The 2012 NPPR charge is based upon the ownership and status of the property on the 31st March 2012. Therefore as you now own a second residential property in Irelandyou will be liable for the NPPR charge. The onus is on property owners to register any properties that are not their principal residence. Property Owners can register their properties and pay the charges online at the nppr.ie website by credit or debit card. The charge for 2012 must be paid before 30^th June 2012.

Any person who does not pay the NPPR charge by the above payment date leaves themselves open to prosecution by the Local Authority to whom the payment is due. A late payment fee will also arise if payment is not made by the payment date. Furthermore, both the NPPR charge and any accumulated late payment fee will be a charge against the property concerned and will continue to be such for twelve years after the charge or late payment fees concerned became due. Any NPPR charges or late payment fees due on a residential property will have to be discharged, in full, before a transfer or sale of the property can be completed. This is an important consideration should you wish to sell the property in question when the market improves.

Finally, I would also advise that you will be liable to Income tax at the marginal rate on any rental profits earned on the second property which you have inherited.

If you wish to discuss this or any of the above further, please do not hesitate to contact RDA Accountants’ Tax manager George Skelton CTA, ACA, at our Wexford office for further assistance.