Dáil Éireann Debate, Wednesday - 14 September 2022
168. Deputy Paul Murphy asked the Minister for Finance if his attention has been drawn to the fact that under the tax rules landlords are only allowed to deduct the mortgage interest as an expense if they are registered with the Residential Tenancies Board (details supplied); if any of the Dáil Deputies who were not registered with the Board deducted the mortgage interest; if so, if the Revenue Commissioners are examining the matter. [44757/22]
View answerI am advised by Revenue that landlords are generally required to register details of their residential tenancies with the Residential Tenancies Board (RTB) but certain types of dwellings can be excluded from registration. The onus is on a landlord to ascertain whether s/he is excluded from the requirement to register tenancies. The excluded types of dwelling are listed under section 3 of the Residential Tenancies Act 2004 Act and include:
- business premises;
- former rent-controlled dwellings occupied by the original tenant or by her or his spouse;
- a dwelling occupied under a shared ownership lease;
- a tenancy where the landlord and tenant share the same self-contained unit;
- a dwelling in which the spouse, parent or child of the landlord is resident and where there is no written lease or tenancy agreement; holiday lettings; or
- a dwelling let by, or to, a public authorities.
Landlords are required to register details of all their tenancies within one month of the commencement of those tenancies. Revenue have advised that if all the tenancies in a dwelling are not registered for a particular year, all interest relief in respect of that dwelling will be lost for the year. There is no provision for apportionment where only some of the tenancies are registered.
An interest deduction is claimed under the normal self-assessment system. A landlord is required to state in the annual return of income that s/he has complied with the registration requirements. I am advised that Revenue regards the registration requirements for a chargeable period as met if they are met by the return filing date for that period. Revenue does not require that evidence of registration is submitted with the return of income, but such evidence should be retained for inspection in the event of a compliance intervention by Revenue.
In accordance with the Residential Tenancies Act 2004 as amended, I am advised that the RTB supplies Revenue with an annual extract of tenancy information held by the RTB. The data provides details of all tenancies with a commencement date beginning on or subsequent to 1 January 2016.
I am further advised that if a landlord’s tax return is selected for a Revenue compliance intervention, written confirmation of the registration of a tenancy from the RTB will be accepted as evidence of compliance with the registration requirements for that tenancy. In the case of an exempt dwelling, the onus will be on the landlord to show that s/he is not required to comply with the registration requirements. If a landlord has failed to comply with the registration requirements for a chargeable period, any interest relief that has been claimed will be withdrawn. Such a withdrawal of interest relief may result in an underpayment of tax and expose the landlord to interest and penalties.
While new tenancies should be registered within one month of their commencement, the Residential Tenancies Act 2004 Act provides for late registration at double the normal registration fee. I am advised that Revenue will accept an acknowledgement from the RTB confirming a late registration as evidence of compliance with the registration requirements provided for in Part 7 of the 2004 Act. However, a person claiming an interest deduction on their annual tax return must be able to indicate compliance with the Part 7 requirements at the time of making the return. I am also advised that if interest relief has been denied for a chargeable period because a tenancy was not registered by the return filing date, the relief can subsequently be restored if the landlord avails of the late registration facility, subject to the usual four-year time limit on claims for repayment of tax.
Revenue has a legal duty to protect the confidentiality of taxpayer information and is obliged to treat personal and business information of all taxpayers in the strictest of confidence. As such, it has advised that it would not be appropriate for it to comment further in response to the matters raised by the Deputy.
