Revenue wins appeal on second home tax deduction ruling

The Revenue Commissioners has won its appeal against a finding that an annual charge levied on second homes and holiday homes is tax deductible against rental income from the properties.

Revenue wins appeal on second home tax deduction ruling

Several cases raising a similar point were awaiting the outcome of the appeal.

The Court of Appeal yesterday overturned a High Court finding that the non-principal private residence charge (NPPR) — introduced in 2009 to help local authorities fund services and replaced in 2013 by the property tax — was deductible against rental income.

The proceedings arose after Thomas Collins, the owner of six rental properties, applied to deduct the NPPR charges from rental income.

In the tax year 2009, Mr Collins paid a total of €1,200 arising from a NPPR charge of €200 on each of the six properties. When he sought to deduct the €1,200 against rental income received under the Taxes Consolidation Act, Revenue said the charges were not deductible against income.

He appealed and an appeals commissioner held in his favour. The appeals commissioner asked the High Court to decide legal issues concerning whether the charge was deductible.

After Ms Justice Leonie Reynolds ruled last year the charge is deductible, Revenue, represented by Jeananne McGovern, appealed to the Court of Appeal. Giving the three-judge court’s judgment yesterday, Mr Justice Gerard Hogan said the NPPR was in some respects a forerunner to the more general form of property tax which has since replaced it.

However, the point raised in this case was of some general importance as several other cases awaited the outcome of the appeal, he said.

A pre-condition for deductibility of the charge required that it be “levied” by a local authority within the meaning of the relevant provision — Section 97.2.b — of the Taxes Consolidation Act 1997, he said.

The NPPR was not a charge levied by a local authority, he held. It was imposed by the Oireachtas and involved an autonomous decision by the Oireachtas which had fixed the amount of the charge, albeit the proceeds were intended to benefit local authorities.

Local authorities were given no power to vary or review the charge and the 2009 act does not fall into the category of local taxation raised by a local authority for tax purposes, he ruled.

He also rejected arguments on behalf of Mr Collins the charge amounted to “double taxation”. The issue of double taxation simply does not arise because the NPPR is a charge in relation to property while the 1997 act provides for a tax on income, the judge said.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited