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NPPR - The Non Principal Private Residence Charge
The Non-Principal Private Residence (NPPR) charge in Ireland was a tax on residential properties that were not the owner's primary residence. Commonly referred to as the "second homes tax", it was introduced in 2009 as a temporary measure to help fund local authorities. It remained in place until 2014.
The NPPR charge applied to any residential property that was not the owner's primary residence, including second homes, rental properties, and holiday homes. The charge was set at €200 per year per property, and it had to be paid annually in March of each year to the local authority in the area where the property was located. The NPPR charge was not deductible against income tax, but it was possible to claim it as an expense against rental income if the property was being rented out.
Why Is It Still Relevant?
It's worth noting that the NPPR charge is no longer in place in Ireland. It was replaced by the Local Property Tax (LPT) in 2013. The LPT is a more comprehensive tax on residential properties, and it applies to both primary residences and non-principal private residences. Legally however the NPPR charge acted as a "charge" on each property. If the NPPR was not paid penalties and interest charges were imposed which still apply. These were arbitrary sums set by the Irish Government in 2014 for those who did not pay. Non payment of the tax affected the ability to sell the property and still does to some extent. At the outset, if no charges had been paid at all, the total figure of €7,680.00 was imposed.
The charge is typically something that affects non-resident owners who were not aware of the obligation to pay. However, the statutory limitation period for collection of taxes in Ireland is typically twelve years. This is the period of time during which unpaid taxes can be recovered by the Irish Revenue Commissioners. Charges that therefore applied in the years 2009 to 2011 have now passed the limitation period and are no longer payable or recoverable. Currently only two liability years remain eligible for payment with interest and penalties, the years 2012 and 2013.
If the Non Principal Private Residence Charge was not paid for either of these years when it became due, the Vendors of the property must pay the following sums:
- If not paid in 2012 but paid in 2013, the sum of €1,110.00
- If paid in 2012 but not paid 2013, the sum of €750.00
- If not paid in either 2012 or 2013, the total sum of €1,860.00
The Charge will cease to apply in full as of the 1st April 2025.
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