Seán Fleming
Question:86. Deputy Sean Fleming asked the Minister for Finance the status of the charging of VAT on rental income in cases (details supplied); and if he will make a statement on the matter. [10420/18]
View answerWednesday, 28 February 2018
Questions (86)
Written answers
I am advised by The Revenue Commissioners that it is not possible to provide a definitive answer based on the information provided by the Deputy.
I would point out that the letting of immovable goods is exempt from VAT in accordance with the EU VAT Directive, with which Irish VAT law must comply. Therefore, the rental income received in respect of residential accommodation is not subject to VAT.
However, prior to April 2007 a landlord could waive the exemption from VAT on rental income from residential property. In those circumstances VAT was charged on the rental income from the property and the landlord was entitled to reclaim VAT on costs incurred in developing, acquiring or renovating that property. Where such a waiver was exercised the rental income received continues to be liable to VAT at the standard rate, currently 23%, and the landlord is obliged to account for that VAT in his or her VAT returns.
The landlord may also avail of the waiver of exemption cancellation provisions set out in the VAT Consolidation Act, 2010 which results in the rental income being no longer subject to VAT. However, cancelling the waiver may also result in a tax liability for the landlord where the input VAT recovered on acquisition or development of the residential property is greater than the output VAT on the rental income.