In a case heard before the High Court in Ireland, it was determined that the Non-Principle Private Residents (NPPR) charge could be taken as a deduction against rental income for income tax purposes. The NPPR charge, which has been abolished since 2013, was a €200 annual change on non-principle private residences and was payable by owners to the local authority. Traditionally, it had been disallowed by Revenue as a deduction.

In this case, it was found by the court that the NPPR was not a central government charge but a local authority charge despite the fact that the framework for the tax had been designed by central government.

Section 97 TCA 1997 allows deductions for “any rate levied by a local authority”. The Court concluded that in the absence of a definition of the term “rate” in the Taxes Acts, the ordinary meaning of this should be examined and was satisfied that the NPPR charge fell within this definition. This is an interesting judgement particularly in light of the timing and the four year limit on amending tax assessments.