Changes to the reporting of letting income

[widge]

More advice…………..

http://hometeamportugal.com/help-reduce ... s-in-2014/

[shanagarry]

As a former property owner I keep an eye on this topic as I harbour a desire to come back one day and 'maybe' buy again. When I read of all of the regulatory obstacles many of you are encountering, my appetite wanes considerably. I have memories of the time when there was little or no compliance involved and we all made a decent return on our investment. Then again that was before the downturn from 2008 onwards after which everything changed beyond recognition - or at least I thought it did.

At the weekend I got a text from a long standing acquaintance from our early days in CVO - someone I have not spoken to for a few years and was just 'catching-up'. He is a property owner (through a company structure) in the Carvoeiro area and has been since 1995. We decided to have a Skype chat and did so on Sunday afternoon. Inevitably the conversation got around to property ownership (after rugby matters) and all this regulatory/compliance stuff during which he astounded me when he told me was not fully aware of the rental licence requirement (he does rent to family and friends) and neither does he declare his rental income - either in Portugal or in his home jurisdiction. He is aware of the revenue/taxation risk he runs and in his words "doesn't give a £$%&". He is prepared to run the risk for as long as he can and more importantly knows many many others who do the same. He has never had so much as a letter or call from any state department despite paying his rates and utilities through a Portuguese bank account - meaning he cannot be 'invisible' to the authorities and doesn't try to be. His words - not mine.

Apart from the revenue issues, his property is in tip-top condition and would pass any inspection to satisfy the authorities - but he won't go to the trouble. He is not short of a Euro or two and takes the view that paying through the nose to keep the bureaucrats happy is not on his list of priorities. I suggested he take the time to read the contents of this thread and other similar topics on this forum and got a text a short time ago with 10 very happy smiley faces - and the words "Good for them".

Clearly many of you who have posted your views on here will not be amused by this but it begs the question - are you in the minority or otherwise? While all of you will undoubtedly sleep easy in your beds at night - my acquaintance doesn't appear to need to count the sheep to get to sleep.

Why am I telling you this? For no other reason than to highlight the blatant unfairness of an unbalanced system that persecutes the law abiding and rewards those who could not care less - but you knew that anyway

[shanagarry]

Sent twice in error

[biffa]

His time may be running out I fear. Things are changing drastically and quickly.

There has always been a philosophy here of either being IN the "system" or staying right OUT of it and the OUT brigade have been ok so far but I do believe that is coming to an end.

[shanagarry]

His time may be running out I fear. Things are changing drastically and quickly.

I'll let you all know when and/or if I know more - as we've agreed to keep in touch

[widge]

His time may be running out I fear. Things are changing drastically and quickly.

There has always been a philosophy here of either being IN the "system" or staying right OUT of it and the OUT brigade have been ok so far but I do believe that is coming to an end.

Are they offering any form of amnesty for those who have hitherto evaded the tax or are those who come clean now subject to retrospective claims and fines?

[biffa]

Not that I am aware of.

[shanagarry]

I suspect those who have been missed thus far will believe they are 'bomb-proof'

[joeysoap]

My problem could be the opposite. When the tax laws changed I visited the tax office in Lagoa to change the IMI liability from my financial rep to myself. I was asked straight up if I rented, I replied that I didn't and I assume the official put that on record. I don't rent, but all around me do (with the execption of a few others, who don't rent either) But if the tax authorities did a 'sweep' of our complex how would we non renters prove that we don't rent? Is the onus on Finance to prove you do rent or on you to prove you don't rent ? Perhaps low EDP and low water charges might satisfy them,- water charges have never been above 3,000 litres in any month in any of the past 3 years.

[biffa]

There is no onus to prove you do NOT rent. If you rent you should declare. If you rent and don't declare and they find out you will have problems. Not so much tax wise but possibly more with ASAE who are the authority inspecting these issues and have powers to issue draconian fines.

[joeysoap]

Thanks Biffa, reasurring. As I am still at work in Ireland, if I were to rent 'above board' the tax here in Ireland would be crippling on the rental.

[shanagarry]

the tax here in Ireland would be crippling on the rental.

Joey - I know of an Irish resident and property owner in Cvo (not the person I referred to in my post - who is not Irish) whose property is in an offshore company and for the reason you outlined - 'is flying under the radar' - for now. I realise we will never know how many are taking the risk - but based on Joey's taxing issue in Ireland and I suspect the rest of Europe is not a lot different - is it any surprise that many/some chose to take that risk - especially if they have a mortgage to repay

[Sheila]

I have also been fined for being a day late in declaring the maid's salary in November 2013 ! So 1 year later I get a fine of €37.50 this is more than the amount I owed.

Who do you have to declare it to and why? Does this apply even if you don't rent out?

[widge]

I employ the maid so I pay her social security contribution. This has to be paid by the12th of each month to the SS. I was a day late and got fined.

[laserblazer]

Sorry if this has already been covered but is there a deadline for getting this up and running. It looks like we will need to get a company to do this for us and take over as our fiscal rep. Did you get my email address @biffa?