What does the property market look like for 2020?

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Good Cop Bad Cop

We have spoken many times in the past couple of years about the difficulties facing prospective home buyers in the current market. Between the rising cost of living and the increasing rental costs limiting the ease of saving the required deposit and the ever-growing cost of properties themselves it has become incredibly difficult to gain a foothold on the property ladder. There is mixed news on this front to herald us into a new decade which leaves a level of uncertainty about what we can expect going forward.

On a positive note it has been reported this week that the construction sector has seen a much-needed boost and has begun growing again for the first time since August 2019. The Ulster Bank Purchasing Managers Index suggests that this growth forecasts a strengthening of the housing construction sector which may hopefully see more supply rise to meet demand. This also extends towards the commercial construction sector which has also reported growth and will be good news for companies looking to Ireland as a new base ahead of Brexit.

The reason for this newfound growth is cited as being a reduced level of Brexit uncertainty. The uncertainty around Brexit has plagued Irish business life for a while now and the easing of this panic is a welcome change across all sectors and reflects a new expectation of continued success in 2020.

This lessening of Brexit panic also has some negative consequences as it has been reported that there is an expectation that despite a new revival of the construction sector, we may see housing prices rise once again in the year ahead. Property price increases had begun to slow significantly towards the end of last year due in large part to Brexit concerns so this will be unwelcome news for any hopefuls currently saving hard. Davy Stockbrokers reports that subsiding Brexit fears may see a higher level of spending on high-end properties. They have stated that average house prices rise by 2% this year with the possibility of further rises “if the top end of the market benefits from reduced Brexit uncertainty.” Davy Stockbrokers also support the suggestion that the construction sector will continue to grow in the year ahead. It is suggested that the increase in time before Brexit becomes reality may be the reason for this lessening of anxiety.

A little bit of good news vs bad news to balance out the beginning of the new decade!

Should you require any guidance or advice on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA, where we are looking forward to helping your business flourish in the roaring 20s.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Solutions for your business to help start 2020 positively…

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Firstly, let us take the time to wish all our clients and friends a very happy and prosperous New Year. 2020 comes to us all with a lot of uncertainty but we will weather any financial storms that may result from Brexit with our patented Irish resilience. As we have bid farewell to the previous decade and turned the page into a new one, thoughts often turn to change and what we can do to change our selves, our positions in life and our career trajectory. We here at EcovisDCA know that all of our clients and friends are incredibly hard working and focused and as such do not wish to start the decade off on a negative footing with a list of changes to be made, rather we have decided to focus on solutions to make your business and financial life run smoother in the years ahead.

 

Update your Payroll System:

As we are all aware, there has been a major overhaul to the PAYE system that has recently come into effect in Ireland. We have discussed these changes in detail in the past, and how they will affect the day to day running of your business, and whilst your payroll staff have long been setting up for this event, it is a good idea to start this new decade off with a review of your new system in case there are ways in which it can be more efficient for you. These PAYE changes are the perfect opportunity to update your current payroll software if needed.

2019, The Year in Review:

Whilst it is important not to dwell entirely on the past, whether 2019 was a more positive or negative financial year for your business it is essential to take a glance into the rearview mirror and assess how your finances were in 2019. Perhaps there are areas here that can be utilised more to your benefit.

Goals, Goals, Goals:

A new year always comes with new personal goals, and a new decade is the perfect opportunity to set some business and financial goals for your business. What are the daily/weekly/monthly steps you can take over the next 12 months to get your business closer to that end goal? Goals can be an essential method of planning out the future of your business.

Deadlines:

As we have spoken about before, Revenue have been overhauling their tax systems and clamping down on evasion and late filing. As we start this new year, take note of all the essential deadlines for the coming year and begin working towards meeting them.

These are just some small ideas to start this new decade of your business off on a positive and energetic note and start as you mean to go on.

Should you have any concerns or queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA. We are looking forward to working with you all during the new roaring 20’s.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

The Repair and Leasing Scheme (RLS)

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Can we Fix it?… We Can Now

With an atmosphere of financial uncertainty and lingering nervousness still abounding at the moment, it is important to find the positives where they can be found. In our case we often endeavor to inform our clients about available schemes and assistances available to them which may be of assistance.

Today we will be discussing the Repair and Leasing Scheme (RLS), developed under Rebuilding Ireland which offers funds to assist property owners in bringing vacant properties back into use. In the event of properties requiring repairs to bring them up to rental standard, the RLS will pay for the repairs up front in return for the property being utilised as social housing for at least 5 years. The scheme will be available in areas where a social housing need has been identified. The property owner will repay this loan by offsetting the repair cost against the rent owed to the owner over the rental period.

The main points of the scheme are as follows:

  • The maximum amount of funding available is €40,000 inclusive of VAT.
  • The maximum funding amount will be raised to €50,000 in the event of a property being a former bedsit.
  • There will be a minimum social housing lease term of 5 years, and a maximum of 20 years.
  • The repairs allowed will in general be smaller works, not requiring any planning permission. The kinds of repairs paid for under the scheme are:
    • New flooring, kitchens or furniture.
    • Low grade plumbing and heating works.
    • Energy efficiency upgrades.
    • Window and door replacements.
    • Painting and Decorating.
  • The requirements to qualify for the scheme are:
    • The property must be vacant for 12 months.
    • There must be a social housing need in the area.
    • The property must undergo assessment to be proven suitable for social housing.

This scheme could be of great benefit to landlords in possession of properties that have been vacant and not generating income as it will offer a guaranteed term of rental income while also upgrading the property to a greater standard.

Should you have any queries on any business or financial matters do not hesitate to contact us here at EcovisDCA where we are always happy to be of service.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Residential Tenancies Board (RTB) New System

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All Above Room and Board

As you will no doubt be aware, there have been a great many changes in the rental sector in recent months as the Residential Tenancies Board (RTB) seek to revamp their system. With such an atmosphere of confusion and uncertainty surrounding so much of the business world of late, we thought that we would break down the most important changes that now apply to landlords and tenants.

As of June 4th, 2019, the following changes apply.

Notice Periods:

There have been changes to the required notice periods for the termination of a tenancy by the landlord, the new notice periods that apply are:

Period of time tenant has lived at the property:

  • Less than 6 Months – New Notice Period: 28 Days
  • More than 6 Months, less than 1 – New Notice Period: 90 Days
  • More than 1 Year, less than 3 – New Notice Period: 120 Days
  • More than 3 Years, less than 7 – New Notice Period: 180 Days
  • More than 7 Years, less than 8 – New Notice Period: 196 Days
  • More than 8 Years – New Notice Period: 224 Days

There have been further changes to notice period requirements in that there are a number of scenarios in which the property must be offered back to the tenant after a period of time. These scenarios are as follows:

  • If the tenancy is terminated for sale of the property, but sale does not occur, or the landlord intends to re-let the property.
  • If the tenancy is terminated for substantial refurbishments, the landlord must offer the property to the tenant on completion of the works.
  • If the tenancy is terminated so that the landlord or their family members can move in, it must be offered to the tenant if it becomes available again within 12 months of the termination.

Landlords must also now send the termination notices to the RTB if the tenancy has lasted more than 6 months.

Rent Pressure Zones:

All existing rent pressure zones have been extended to 31st December 2021, and with new criteria in place it is advisable to check the status of your property. There will naturally be some exemptions to the rent pressure zone rules, should you wish to claim an exemption it is essential to notify the RTB within a month of setting the rent.

Outside of these pressure zones, landlords can only set and change the rent 24 months after commencement or rent review.

It is important to note that as well as these changes, the RTB will be revamping their investigative measures and clamping down on any issues so it is vital to ensure that you are following the new regulations. All information will be available through the RTB website.

As always, we are available to answer any queries on all business and financial matters and we look forward to speaking to you soon.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

 

Beneficial Owner Register Deadline

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Make Haste While the Sun Shines

We are writing to you in respect of a very important deadline concerning the establishment of a Central Register of Beneficial Owners.

The Register itself is overseen by the Department of Finance and the impetus for this EU led legislation has been to increase access, across the EU Member States, to accurate information regarding beneficial ownership.  This, in turn, is seen as critical to the effective deterrence of criminal activities that could be shielded by corporate structures.  As these new requirements are therefore being implemented from legislation designed to target anti-money laundering and terrorist-financing, we do expect the enforcement regime to be severe and uncompromising.
Background
The European Union has legislated for a number of Anti-Money laundering directives over the last few years. The full effect of what are known as the 4th/5th directives comes into effect over an 18 month period from July 2018
On 15th November 2016, a new requirement was introduced for ALL Irish registered companies which imposed on them the necessity to create and maintain an internal Register of Beneficial Owners.

A new online portal went live to facilitate the uploading of information to a central register, www.rbo.gov.ie

There is a deadline expiring on 22nd November 2019, for compliance for existing companies from the date the central database went live.

A beneficial owner is defined as a person who owns in excess of 25% of a company, directly or indirectly.

It is important to note that the Central Register of Beneficial Ownership is separate and distinct from the Companies Registration Office and the annual filings that a company must make to the CRO.

Some important points in relation to these regulations are as follows:
  • Companies should have created/must now create an internal register of their beneficial owners and ensure this is maintained and updated.
  • In order to have populated, or to now populate, this Register, the company should have sent, or must now send, notices to persons whom they reasonably believe are beneficial owners, or to third parties who may be reasonably expected to know the identities of the beneficial owners
  • This information must be subsequently uploaded through an online portal to the Central Register of Beneficial Ownership
  • Non-compliance is a criminal offence and companies may be subject to fines of up to €500,000 if convicted on indictment.  In addition, a beneficial owner who fails to comply with a relevant notice from the company may also be liable to a 12-month prison term.
The information captured for each beneficial owner is as follows:
  • Name (these details must agree to the records held with the Department of Social Protection)
  • Date of birth
  • PPSN
  • Residential Address (these details must agree to the records held with the Department of Social Protection)
  • Nationality
  • Details of nature and extent of interest held/control exercised by each beneficial owner
  • Date on which the beneficial owner was first entered into the company’s internal register.
If you wish to avail of this service, please complete the attached order form and email to cro@ecovis.ie.
For further information on this please do not hesitate to contact any of us in Ecovis Dca Ltd. and we will be delighted to assist you. The basic cost of this service will be €295 plus VAT, invoiced directly by EcovisDca Ltd. The fee is payable in advance on the information sheet referred to above. If any unforeseen issues arise on setting up the registration an additional charge may be incurred.
Yours sincerely,
Ecovis Dca Ltd

Section 23 Tax Relief

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The Rented Residential Tax Relief

In these uncertain times there is a great deal of focus on the negatives, particularly in terms of the housing market. We are consistently reminded of how astronomical prices are, and how difficult it is for people to get on to the property ladder to begin with. Following on from our previous posts we have decided to turn our focus towards the positive and offer or friends and followers vital information on the various forms of assistance and relief available to them in various situations.

Today we will focus on Section 23 Relief which has been one of the most successful property tax reliefs in Ireland to date. Section 23 Relief is a form of rented residential relief and applies to properties within a tax incentive area and is available to individuals who have incurred expense on the purchase, construction, conversion or refurbishment of a property and who lets that property for its first use on the open market. This has, over the years, resulted in a marked improvement in the quality of rental accommodation in some areas. The relief can be set against the rent received and will serve to reduce the amount of the individual’s taxable income.

In order to assess your property’s eligibility for the scheme, it is vital to check that the property is within a qualifying area and also that the work was carried out within the required time period as no payments can be made in advance of work being carried out. This relief does not extend to furnishing costs and the property must be used as a dwelling or shop unit and for no other purposes.

The owner must rent the property for a period of 10 years from the first letting and certain conditions will apply in the event of the property being passed on which may make these properties attractive prospects for the next owner.

Should your property not qualify for Section 23 Relief it would be worth checking if perhaps Owner-Occupier Relief would apply to your circumstances.

As always, we are available to answer any queries on all business and financial matters and we look forward to speaking to you soon.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

 

Budget 2020 – Saving for a Rainy Brexit

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It’s that magical time of the year once again as the days get shorter, the nights get longer, and we wonder what awaits us in the year ahead as the Budget announcements are made. Does Budget 2020 hold more tricks or treats for us? With the possibility of a Hard Brexit facing us, there is quite a lot resting on this budget in order to safeguard our country’s finances. As always, we here at EcovisDCA are here to break down this year’s budget announcements into ‘treat size’ chunks.
As expected, Brexit is something that has been discussed for Budget 2020 with Minister for Finance Paschal Donohoe stating that “Brexit is the most pressing and immediate risk to our economy.” With this in mind, the Government have decided to create a €1.2billion package in 2 parts with €200million immediate investment into Ireland regardless of the outcome of Brexit, which we will discuss separately in the coming weeks.
Budget 2020 has already come under fire for seemingly not supporting the general public by offering no cuts to personal tax or across the board increases to social welfare payments in favour of a focus on the overall safeguarding of the country in the looming shadow of Brexit.So, what changes await in Budget 2020?

Personal Tax:
  • There are no changes to your Income Tax Credits & Bands.
  • The Home Carer Tax Credit has been Increase from €1,500 to €1,600.
  • The Earned Income Tax Credit of €1,350 increases to €1,500.
  • A further 1 Year Extension to the reduced rate of USC for medical card holders.
  • The Help to Buy (HTB) scheme has been extended in its present format until 31 December 2021.
  • A new Carbon Tax will see petrol and diesel prices rise by 2c with immediate effect. This increase will not apply to home heating fuels until 2020.
  • €2 increase in weekly fuel allowance
  • €10 increase in the income threshold for the working family payment for families with up to 3 children.
  • €15 increase in the one-parent family payment.
  • €5 increase in the living alone allowance.
  • Free GP care extended to under 8s with free dental care for under 6s.
Corporation and Capital Gains Tax/Business Tax
  • Key Employee Engagement Programme (KEEP)
    • Details of further enhancement to the existing programme to be announced.
  • Employment and Investment (EII)
    • Details of further enhancement to the existing programme to be announced.
  • Special Assignee Relief Programme (SARP)
    • Extension of the relief in its present format until 31 December 2022.
  • Foreign Earnings Deduction
    • Extension in its present format until 31 December 2022.
  • Research and Development Tax credit
    • Enhancements to credit for small and micro-companies.
    • Increase in third level outsourcing limit.
  • Microbrewery relief
    • Production ceiling for qualification, raised from 40,000hl to 50,000hl.
  • Diesel Rebate Scheme
    • Relief for users of the scheme from the increase in carbon tax.
  • Living City Initiative
    • Extension in its present format until 31 December 2022.
  • Dividend Withholding Tax
    • The rate of DWT is being increased from 20% to 25% with effect from 1/1/2020
    • From 1/1/2021 it is intended that a “real-time” modified system of DWT will be introduced similar to the new PAYE modernization system that will reflect each individual taxpayer’s current rate of tax at the time of the dividend. This should result in a cash flow boost to the exchequer.
  • Capital Gains Tax
    • Extension of Section 604B Capital Gains Tax Relief for Farm Restructuring.
  • Further Levy on Certain Financial Institutions (Bank Levy)
    • Bank Levy is to be increased from 59% of DIRT in the base year 2015 to 170% of DIRT in the base year 2017
Anti-Avoidance
  • Scientific research: In relation to the allowance for capital expenditure on scientific research there is to be a correction to an unintended additional relief.
  • Collective Property Investment Compliance Measures:
  • Irish Real Estate Funds (IREFs) and Section 110 anti-avoidance.
  • Real Estate Investment Trusts (REITs) /capital disposals.
  • BEPS Implementation
    • Introduction of Anti-Hybrid Rules.
    • EU Anti-Tax Avoidance Directive – ATAD.
    • Modernisation of Transfer Pricing rules.
Climate and Environmental measures
  • Carbon Tax: Increase the rate by €6 to €26 per tonne.
  • Electricity Tax: Equalise the rate for businesses with that of non-business.
  • Vehicle Registration Tax
  • VRT Environmental Health (NOx) Surcharge.
  • Extension of VRT relief for hybrids and plug-in hybrid electric vehicles
VAT:
  • No Changes
Capital Acquisition Tax:
The tax-free threshold on gifts and inheritances passing from parents to children is being increased from €320,000 to €335,000. Applicable to gifts and inheritances received on or after 9/10/2019Stamp Duty:

  • Stamp Duty on Non-Residential Property is being increased from 6 % to 7.5% from 8th October 2020. The Duty will be reduced back to the residential rate of 2% (with a resulting refund due) where the land is subsequently used for residential development.
  • A new charge of 1% is to be introduced where a “scheme of arrangement” (Part 9 of the companies Act) is used for the acquisition of a company.

 Excise Duties:

  • Tobacco: 20 cigarettes increased by 50 cents (including VAT) with a pro-rata increase on the other tobacco products.
  • Betting Duty: Introduction of a relief from betting duty and betting intermediary duty up to a limit of €50,000 per calendar year.  This relief only applies to single undertakings.
These are the main changes announced, and this is certainly a more cautious budget than we have seen in recent years which is understandable given the atmosphere of uncertainty we currently exist in. It remains to be seen what effect Brexit will have on our shores going forward, but it is hoped that enough will have been done in this budget for our small island to have some wiggle room to get situated in this new business landscape.

Should you have any queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to assist.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Budgeting for the Budget

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As the Budget announcement approaches, conversation has turned largely to conjecture over what changes may be made to safeguard against Brexit related issues. As you will all be aware, we here at EcovisDCA are massive supporters of Small and Medium Enterprises (SMEs). These vital businesses are enormously important to Irish business in general and due to their size are vulnerable during this uncertain time.

Recently Dublin Chamber Chief Executive Mary Rose Burke spoke out about the importance of safeguarding these businesses and enabling them to not only survive but to thrive in  a post-Brexit world and suggested that Burget 2020 must endeavour to help SMEs to compete with larger, more economically attractive companies. In order to face Brexit head on, Burke suggests that Capital Gains Tax may be the first port of call as the current set up of an overall 33% rate is damaging to small companies and favours attracting larger companies. It is suggested that this be reduced to 20% for all unlisted trading firms and should take into account the level of risk taken by entrepreneurs in order to protect these important business owners.

“We need to foster an entrepreneurial environment and strengthen Ireland’s indigenous business base.”

Given that SMEs form over half of all Irish business operations, it would be wise to begin investing heavily in the entrepreneurial spirit that exists in our country. The Dublin Chamber has stated that the UK is ahead of Ireland in terms of supporting Irish SMEs, and proposes that we follow suit. The current taxation system which applies across the board actively encourages investment in larger multinationals over SMEs. As these large companies are such a small fraction, it is easy to see how smaller businesses may suffer further blows following Brexit, as Burke suggests;

“[Large multinationals] are already more attractive for entrepreneurs. We need to look to improve our competitiveness in ways that are under our control. […] with Brexit on the horixon, it is vital that we react and fight back.”

There is a concern that if changes are not made in the coming Budget, the UK may eclipse our small island in terms of attractiveness to foreign trade which could see significant damage dealt to our economy. As such a long term plan in the coming Budget would be a welcome safety net for Irish SMEs

As always, we will be reporting on this year’s budget as it happens and keeping you up to date on what these changes will mean for you and your business. Should you have any concerns or queries on any business or financial issues, please don’t hesitate to contact us here at EcovisDCA where we are always happy to assist.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Home Renovation Incentive Tax Credit

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A Bit of a Fixer Upper

We have spoken many times over the years about the ongoing struggle people face in attempting to gain a foothold on the elusive property ladder, but what about those who are already securely on the ladder and seeking to upgrade their home whether the home is their forever home or being rented out to tenants? The good news is there is relief available in the form of a Home Renovation Incentive Tax Credit. Tax Credit is always a welcome term, particularly when it comes to necessary renovations.

The HRI is a form of Income Tax relief for homeowners including landlords and local authority tenants who are paying tax. The relief applies to renovations and approvements including painting, tiling, plastering, electrical work, window replacements, attic conversions, fitted kitchens and more. This relief allows the homeowner to claim a tax credit of 13.5%. New builds do not qualify for this scheme and the home must be either your main home, a home you rent out to tenants, or a local authority home and you must be registered as the homeowner on Revenue’s Local Property Tax Register. If the property is jointly owned, both owners can claim the credit.

To qualify for the tax credit, the homeowner must spend at least €4,405 on either one or a number of projects on the property and can be completed by one or more qualifying contractors. A maximum claim of €30,000 of total cost applies. If the property is divided into multiple rental units, each can be treated individually for the purposes of HRI.

The amount of HRI credit that can be claimed will depend on the amount spent on the renovations and also any grants or compensations claimed. In the event that you have received a grant for the works, the qualifying amount will be reduced by three times the grant amount.

Should you have any queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to assist.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Is your Business Brexit Ready?

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Let’s Get Ready…

One of the most popular topics of conversation over the past few months, and certainly something we have touched on multiple times over the long and drawn out course of negotiations is Britain’s Exit from the European Union, more commonly known as ‘Brexit’. Ireland is certain to be the EU member state most directly affected by this change.

Since the impending exit was announced, a series of extensions, questions and near blunders has left many wondering if the exit would in fact ever take place. With a new Prime Minister now in place in the form of Boris Johnson, a set date of October 31st 2019 and the knowledge that business dealings between Ireland and Britain are certain to change with the possibility of hard borders being implemented it is high time to begin considering measures to protect your business if this hasn’t already been considered.

According to the government, there will be a number of contingency measures in place to navigate the complexity of Brexit, but what about what really matters to you, the direct effect of Brexit on your company or business? What measures can be taken to directly safeguard what matters most to you?

  • The first method in which you can safeguard your business is ensuring that you are completely up to date on the Brexit situation so that you can stay ahead of these coming changes.
  • Crucially, your business may be entitled to access certain loans and schemes to safeguard your company against the negative effects of Brexit. This will be particularly important for SMEs.
  • It is vital to assess how your supply chain is connected to the United Kingdom market to offset any disruption in advance.
  • Research all suggested changes to importing and exporting from the UK. This will allow you greater insight into how Brexit will affect your company.
  • Create awareness of transport changes between Ireland and the UK.
  • Ensure that any required certification is up to date for trade with the UK.
  • Review current contracts to ensure that no changes need to be made to account for coming changes. It may also be necessary to investigate any potential changes to driving license requirements for driving within the UK.
  • There may be some changes to the value of Sterling in the wake of Brexit, so it is recommended to study how this may affect your business to better protect it and ensure that there is enough liquidity to weather the storm.
  • It is important to ensure that all staff are informed in advance of all changes and new requirements for trade.
  • As we have previously discussed, registering for an EORI number for UK trade is crucial.
  • As customs may become a new issue for UK trade, consider hiring a customs agent if you are not in a position to navigate this issue yourself.

These are just a couple of ways in which you can navigate Brexit issues in advance, as well as these, we would recommend studying the government’s booklets on Brexit and complete the Brexit preparedness checklist which can all be accessed here:

» Click here to download the Brexit Ready Checklist

Should you have any queries on any business or financial matters do not hesitate to contact us here at EcovisDCA where we are always happy to be of service.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY