High Court rules NPPR charge is deductible against rental income

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The Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011, introduced a €200 annual charge on non principal private residences (NPPR), payable by the owners to the local authority in whose area the property concerned is located.

The NPPR charge applied for all years from 2009 to 2013 inclusive. The charge has since been replaced by Local Property Tax.

Historically, the Revenue did not allow the NPPR as a deduction against rental profits for income tax purposes. This position was challenged by a tax payer and the High Court has now ruled that the charge is an allowable tax deduction against rental profits.

Landlords have until 31 December 2017 to submit an amended income tax return for 2013 to include the 2013 NPPR charge. However, due to Revenue’s four-year time limit for claiming income tax refunds, taxpayers will not be entitled to claim a tax-deduction for NPPR charges paid in years 2009 – 2012 inclusive.

Revenue are appealing the High Court decision to the Court of Appeal. Until that appeal is decided Revenue will not amend assessments or process repayment claims based on the High Court judgement. 

However, any claims in relation to 2013 that are received before 31 December 2017, will be retained by Revenue and processed when the outcome of the Appeal case is known – albeit this may be after 31 December 2017.

If you wish for OSK to process an NPPR deduction in respect of 2013 please contact Roisin McDaid in our Tax Department. 

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