Tax Payment and Registration Issues for Irish Citizens Born in Northern Ireland or UK Citizens in Dealing with Property in the Republic of Ireland
Tughans’ Real Estate Department discuss issues arising when a person, not ordinarily resident in the Republic of Ireland and not holding the Irish equivalent of a UK National Insurance Number (called a Personal Public Service Number “PPS Number”), seeks to buy or sell, grant a lease, or take a lease of property in the Republic of Ireland.
Prior to 2009, property located in the Republic of Ireland could be transacted by persons not having a PPS number (being such persons who had never worked in the Republic of Ireland or who had never claimed welfare entitlements and so therefore had never received a PPS number). From 2009 onwards, persons dealing in Republic of Ireland property need PPS numbers to register for and obtain Certificates of Discharge and/or Certificates of Exemption for NPPR Charge (as referred to hereafter) and obtain receipts for payment of LPT and Household Charge (also referred to hereafter). In addition, PPS numbers are now needed to allow both a vendor and a purchaser to register on the Irish Revenue Commissioner’s online stamp duty payment system (“ROS”) and so allow payment of stamp duty on executed deeds to be completed after a property transaction has concluded.
The post 2009 property taxes affecting Republic of Ireland property are explained as follows:
1. Non Principal Private Residence (NPPR) Charge
Non Principal Private Residence (NPPR) charge is an annual charge that applied from 2009-2013 (inclusive) in respect of residential property located in the Republic of Ireland that was not the main owner’s principal private residence (such as a holiday home or buy to let residential property) and applies to persons resident in the Republic of Ireland and overseas owners (including Irish citizens born and ordinarily resident in Northern Ireland and UK Citizens not ordinarily resident in the Republic of Ireland).This amounted to a charge of €200 at each of the liability dates (the 2009 liability date was 31 July with the tax to have been paid by 30 September 2009 and for the years 2010, 2011, 2012 and 2013 the liability date is 31 March in each of those years with the tax to have been paid by 31 May in each of those years). If these monies were not paid in the years 2009 to 2013 (inclusive), the overall tax payable, incorporating late payment fees and penalties, now stands and is capped at €7,230 to 31 August 2014. Such a property tax was levied (subject to certain exceptions) if:-
- You owned more than one home;
- You owned only one home and this home was not your principal private residence;
- You lived abroad (including, inter alia, Northern Ireland, England, Wales or Scotland) and you owned residential property in the Republic of Ireland.
2. Household Charge
In 2012, a Household Charge of €100 was levied on all residential property in the Republic of Ireland to fund local services. This was a charge payable on residential property on 1 January 2012 by a registered owner of such residential property even if they lived abroad (including Irish citizens born and ordinarily resident in Northern Ireland and UK Citizens not ordinarily resident in the Republic of Ireland). Since 1 July 2013, any outstanding Household Charge has been increased to €200 and added to Local Property Tax payable (See 3 below). Additional arrears were capped at €130 in April 2013, €144 in May 2013 and €145 for June 2013.
3. Local Property Tax (LPT)
In 2013, an annual Local Property Tax (LPT) was charged on all residential property located in the Republic of Ireland (subject to certain exceptions). Registered owners of residential property are liable and the tax is based on a self assessment of the market value of the property on certain liability dates. The liability date was 1 May 2013 for 2013 and from 2014 onwards the liability date is always 1 November in the preceding year so, for example, 1 November 2014 is the liability date for the year 2015 as determined by certain value bands that are applicable to 2019 when they will likely be revised. The tax is based on the market value of the applicable residential property on the open market on the liability date(s).
See link below to calculate Local Property Tax calculation of liability for 2017.
To access a record of your LPT payments, you can log on to Revenue.ie and proceed to the LPT website. To get access to your information you will need your PPS number, your Property ID Number and a PIN number. If you do not have these have, you can access the same website, and by providing your PPS number or tax reference number you can request your property ID number/ PIN Number. These will then be sent out by post to you.
Selling / Buying Republic Of Ireland Property
NPPR Charge, Local Property Tax and the Household Charge are all deemed to be outstanding taxes (unless paid) on residential property amounting, in effect, to unpaid charges that must be cleared by a vendor in any sale of residential property by providing either a Certificate of Discharge and/or a Certificate of Exemption to a purchaser as evidence of payment or exemption of the NPPR charge and receipts for payment of LPT and Household Charge before the property can be transferred. It is possible for a non resident owner to pay the NPPR Charge without a PPS number but to register for LPT and the Household Charge and obtain receipts of payment, an individual owner of residential property must be in possession of a PPS number (be it a PPS number that can be used for all applicable purposes or a restricted PPS number ending in “H” that is only useable for payment of LPT) and if a company it must be in possession of a Republic of Ireland tax reference number. A restricted PPS number ending in “H” can be allocated to a non-resident individual to allow that individual make an LPT return but such a number can only be used for payment of LPT and when a “H” PPS number is received from Client Identity Services section of the Department of Social Protection, the number will need to be “activated” for stamp duty purposes by contacting the National Stamp Duty Office of the Revenue Commissioners in order to allow such PPS number to be used in paying stamp duty on the sale / purchase (or lease) of property located in the Republic of Ireland.
As mentioned, it is possible for a UK resident to own a residential property in the Republic of Ireland (i.e. a holiday home or an investment property) without ever having obtained a PPS number (prior to 2009) and it is advisable to have valid and activated PPS numbers prior to entering into any contract for sale. An Irish citizen born in Northern Ireland or a UK Citizen in applying to the Department of Social Protection in the Republic of Ireland needs to complete an application form for a PPS Number and prove their identity by exhibiting either a certified copy of a current passport or a birth certificate or current driving licence, and by the Department of Social Protection Website provide evidence of an address in Ireland including an up to date (in the last 6 months) utility bill, financial statement, official letter and/or official document. The following documents are deemed not acceptable including, inter alia, a baptismal certificate, employment identity cards or personal letters, photo-copies of certificates/documents and expired documents (for Irish and UK citizens passports expired within the last 12 months may be accepted).
There is no definitive timeframe for the issuing of PPS numbers by the Department of Social Protection. It is dependent on demand for such numbers at the time of the application. If the application is delayed (for whatever reason), this can cause difficulty if a Contract for Sale has been signed and exchanged between the parties and a closing date included without regard as to whether the vendor and/or purchaser are in possession of PPS numbers as the transaction cannot complete until the vendor’s PPS number has been obtained (with the purchaser’s PPS number to be got at the latest, unless a further extension can be got, 44 days after the closing date to avoid stamp duty penalties and surcharges). It is therefore essential for any individual owner of a residential property located in the Republic of Ireland not holding a PPS number applicable for paying stamp duty to apply for one at the earliest opportunity and “activate it” by confirming its details with the Irish Revenue Commissioners prior to entering into a binding contract for sale and Tughans can assist with this process.
This article is for general guidance only and should not be regarded as a substitute for professional advice and specific advice should always be obtained before acting on any of the matters as discussed.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.