Man unfairly charged penalties on ‘second-home tax’

In recent years I have received a number of complaints about the Non Principal Private Residence charge (also known as the ‘second-home’ tax). Many of these came from home owners living abroad who claim they were not aware of the charge. I upheld such complaints in a very limited number of circumstances such as the ones set out in this next case.

Background

A man was charged €6,230 in late payment penalties by Cork City Council for failing to pay his Non Principal Private Residence charge (NPPR) on time for a house he owned in Cork. The man and his wife live in Australia and rarely visited Ireland. He bought the property before the tax was introduced in 2009 and said that he was unaware that such a payment was due. The man rented the property out and had engaged an auctioneer to deal with any maintenance issues that might arise during the tenancy. He had no objection to paying the €1,000 charge but sought to have the late payment penalty removed.

Examination

NPPR was a tax applied from 2009-2013 in respect of a residential property that was not the owner’s only or main residence in those years. It was a self-declaration tax and the onus was on the owner to register the property and pay the tax. The Ombudsman agreed a framework with Local Authorities in relation to NPPR charges. They provided that if a property owner, living abroad, satisfied a number of conditions they would be is eligible for a 50% reduction in late payment penalties.

The man was not notified of his liability by the Council before the penalties accrued. He rarely visited Ireland, did not own more than one property liable for NPPR, and he did not have his property managed by an agent.

The Council accepted that the Auctioneer had a very limited role in dealing with maintenance issues and did not manage the property.

Outcome

The Council agreed that he met all five conditions required and agreed to reduce the amount the man owed in late payment fees by 50% resulting in a saving of over €3,000 to the man.