Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Section 97(2)(e) of the Taxes Consolidation Act 1997 commits the deduction for tax purposes of interest on borrowed money employed in the purchase, improvement or repair of premises against rental income. Under section 97(2), however, this interest relief is not authorised unless the person claiming it can show that he or she has complied with part 7 of the Residential Tenancies Act 2004 to register residential tenancies with the now PRTB. The purpose of this section is to encourage compliance with the PRTB rather than to deny the tax relief.

To that end, the return of income forms for individuals and companies, form 11 and form CT1, both include a tick box to confirm that the tenancy is registered with the PRTB. If the box is ticked and in an examination of the return Revenue finds the tenancy has not been registered with the PRTB at the time of filling out the return then the interest deductibility is denied.

Landlords are required to register details of all their tenancies within one month of the commencement of those tenancies. While new tenancies should be registered within one month of their commencement, provision is also made in the Residential Tenancies Act for late registration at double the normal registration fee. An acknowledgement from the RTB confirming registration in the case of a late registration will be accepted by Revenue as evidence of compliance with Part 7 of the Residential Tenancies Act. However, a person claiming an interest deduction on an annual tax return must be able to indicate compliance with the Part 7 requirements at the time of making the return.

If a tenancy is registered late, Revenue adopts the following administrative practice: “Interest relief that has been denied for a particular chargeable period because a tenancy was not registered by the return filing date for that period can subsequently be restored if the landlord avails of the late registration facility, subject to the usual four year time limit on claims for repayment of tax.”

Having regard to these points, I do not propose to accept the amendments.