Revenue to track rental income from landlords for first time

The Revenue Commissioners is set to increase its oversight of residential landlords by collecting information on the amount of rental income they disclose for the first time. The move comes as Government gets set to step up its input into the housing sector in order to alleviate the housing shortage in Budget 2018.

According to a spokeswoman for Revenue, “given the policy interest in the rental market”, as well as its ongoing risk analysis and compliance work in this sector, it was decided to enhance the information it collects by amending form 11, the document filed by those with self-employed or unearned income, to enable it to collate data on income tax owed by landlords in the residential property sector.

Previously, tax returns did not require rental income to be returned in a way that would enable residential property letting income to be separately identified from rental income from other types of property, such as commercial property.

Tax burden

This means that despite claims from residential landlords that their tax burden has increased substantially in recent years, it may not actually be possible to demonstrate that their tax contributions have in fact increased.

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The only information extracted from tax returns up until this year is data on tax revenue from all real estate activities – including sales and lettings of private and commercial property.

This shows that from 2011 to 2016, income tax revenues from the self-employed engaged in real estate activities rose from €171.34 million to €520.8 million, an increase of more than 200 per cent.

To address this information gap, the Revenue has introduced separate data fields for residential property rental income and non-residential property rental income on the 2016 form 11, which must be filed by end-October, or November 14th for those filing online.

It means that when the returns are collated, some time next year, the Revenue will have a clear view of tax revenues from the residential letting sector.