Irish overseas homeowners warned of tax pitfalls
Irish owners of overseas holiday homes may be liable for tax in that country even if they do not rent out their property, an expert warned today.
Speaking in Dublin last week at an Aareal Bank seminar on property investment in Italy, tax expert Luke Prendergast also said that those that do rent out their homes for even short periods may be liable to file an additional tax return in Ireland.
“In Italy, and indeed a number of other European countries, there is an imputed tax whereby you are assumed to rent your property even if you don’t,” said Mr Prendergast.
“Existing Irish owners and new buyers should take advice to make sure they do not run foul of the tax authorities overseas or at home,” said Mr Prendergast.
He also warned that there remains a wide diversity between tax regimes in Ireland and continental Europe.
“For example, while there is capital gains tax in Italy it does not apply where the property is sold after five years of ownership,” he said. “Such differences emphasise the need for expert advice.”
Mr Prendergast also explained that investors no longer have to pay capital gains tax in both countries when they sell their overseas property. This was not always the position before the rules were changed in the recent Finance Bill.
