Fianna Fáil Spokesperson on Finance, Michael McGrath has said that the Minister for Finance and the Revenue Commissioners need to clarify the situation facing landlords who were wrongly denied a tax deduction on their Non-Principal Private Residence (NPPR) charge over the 2009 to 2013 period and who could now miss out on a refund due to the four year rule.
Deputy McGrath was commenting as the Minister for Finance Michael Noonan confirmed in a Dáil reply to him that the Revenue Commissioners have appealed last month’s High Court ruling that the NPPR charge – which has since been abolished – should have been allowed by Revenue as a deductible expense for tax purposes.
Deputy McGrath commented, “Given that over €440m has been collected by the State from the NPPR charge and the fact that many landlords have paid a marginal tax rate of over 50% on rental income, the tax refund due to owners of properties that were rented out is likely to run into tens of millions of euro.
“It seems that the State’s strategy is to wind down the clock so as to deny property owners the tax refund they are now legitimately due arising from the High Court decision. This seems particularly so given that the High Court upheld the judgment by a tax appeal commissioner in this case dating back to 2013.
“It is not clear how long it will take for the Court of Appeal to make a decision on this issue. In the interim, all those who paid the NPPR and who paid tax on rental profits during the years in question would be well advised to submit a claim for a refund of the tax they overpaid. I believe there is an onus on the Revenue Commissioners to inform those who paid tax on rental income that this exceptional situation that has arisen.
“If the Court of Appeal decides against the State in this case, it would be fundamentally unfair to deny taxpayers a refund because the Revenue incorrectly interpreted the tax law for several years. Under the present rules, any tax overpaid prior to 2013 is already caught by the four year rule and the taxpayer can’t claim it back.
In that scenario, the Minister for Finance will have to take whatever steps are necessary to ensure that tax overpaid because of an error on the part of Revenue is repaid to taxpayers,” concluded McGrath.