LETTING agents are reporting a marked increase in the number of properties on their books owned by landlords living abroad, and say that many are initially unaware of the tax laws for overseas landlords.

“It’s no surprise given the times we are in that the number of landlords living abroad is much higher than a couple of years ago,” says Dublin docklands estate agent Owen Reilly, who says that 40 per cent of the properties on his books at the moment are owned by overseas landlords.

“This week alone I’ve seen three young professionals who are moving to London. Not all of them have have lost their jobs, some are chasing big opportunities overseas.

“Quite a few are thirtysomethings with apartments in Dublin 2 or the docklands who bought at the height of the market. They would normally have opted to sell but now have to rent.”

Robert Ward, branch manager of Douglas Newman Good Lettings, says an average of 20 per cent of the landlords his agency sees every week are moving abroad, largely families moving to Canada and Australia.

“It could be that they are renting the property because they are in negative equity and can’t sell or because their plan is to eventually come back to the family home.”

This trend is causing problems both for both overseas landlords and their tenants, who are often unaware of the current tax implications.

This week Cork Labour TD Ciarán Lynch called for the urgent reform of the current system where a tenant must deduct 20 per cent of the rent and forward it to the Revenue Commissioners on the landlord’s behalf . He said this places an unfair onus on the tenant to pay the landlord’s tax bill.

Some landlords on the verge of emigration don’t realise that if they’re out of the country for 188 days, they have to apply for a new PPS number and are treated as an overseas landlord.

If a management agent has been appointed to look after the property (at a cost of 8-10 per cent of the annual rent) and instructed to make income tax returns, the onus is on the agent to make tax returns. “A lot of people moving abroad never intended to be landlords so they wouldn’t have a huge amount of knowledge initially until we inform them of the tax situation,” says Ward.

Reilly says the landlords on his books tend to be early thirtysomethings. “In my experience, most of them have mortgage repayments and depending on how the property was financed, the rent might cover the cost of the mortgage, but very few are making money out of it.”

See QA, page 2