Tax body rules against landlord of facility for asylum seekers

PROVIDERS of emergency accommodation should not be able to avail of tax reliefs by claiming payments from local authorities represent rental income, it has been ruled.

A landlord with a 14-bed facility for asylum seekers in Dublin had challenged a tax demand for almost €59,000 issued by Revenue over monies he received from Dublin City Council for providing emergency accommodation. The Tax Appeals Commission did not accept the businessman’s claims that such payments should be class as rent for which he could claim ‘Section 23 relief’.

A hearing of the TAC was informed that the landlord entered an annual contract worth €122,640 in July 2003 to provide emergency accommodation for homeless foreign nationals. Revenue claimed the income was derived from trading activities and should be assessed accordingly for income tax.

The issue arose after his tax returns for 2010 and 2011 were selected for audit and Revenue assessed that he had a tax bill due of €58,846.43, from what he was paid for providing emergency accommodation over the period.

The TAC heard that the landlord had declared money received from the council between 2001 and 2007 as income assessable for income tax. However, he had categorised such payments as rent between 2008 and 2012.

The appellant, who owned 18 other properties at the time, denied he has involved in trading, as that would entail bookings, reservations and payments, etc, which did not happen.

However, Revenue said the property remained at all times under the control of the appellant and that he also occupied part of it, which meant there was no landlord/tenant relationship in place. In his ruling, Conor Kennedy, an appeal commissioner, agreed and said the owner was engaged in a trading activity, as services he performed were ‘significantly more extensive’ than the type of services normally provided by a landlord.