The bottom line on paying the correct property tax
Fiona Reddan takes property owners through the details of the forms that will shortly land through their doors
Two detached properties on Mervillle Road, Stillorgan, Co Dublin, sold in February: one for €528,000 and one for €473,000. But according to Revenue’s valuation guide, houses in this area fall into Band 7: €350,001-€400,000. Graphic: Myhome.ie
After years of speculation and controversy, householders around the State will this week start to receive an estimate of just how much they owe the Revenue Commissioners for the new Local Property Tax (LPT).
Determining the market value of a property in today’s climate is not a straightforward task, while many homeowners, who forked out exorbitant amounts on stamp duty during the boom, rightly feel aggrieved at being further taxed on those same properties.
Remember those dinner party conversations which focused on the seemingly inexorable rise of house prices? Now it’s all about downplaying your home’s value while still ensuring you’re compliant with the tax. Below are the steps you need to consider when filing your LPT return.
Assess whether you’re liable
The Revenue Commissioners yesterday started sending out a tax return form as well as an explanatory booklet on the new tax. The letter may take up to four weeks to reach you, but once you get it you should find the process a little bit clearer.
The booklet will provide guidance on assessing the value of a property, working out how much LPT will have to be paid, completing the LPT return form and what range of methods are available to pay LPT.
If you get the form but don’t think you are liable for the tax – perhaps because you are a tenant or you have sold the property indicated – you will need to contact Revenue within 30 days, providing information as to why you don’t think you are liable. Failure to do this within this time frame will mean that you will be liable to pay the tax.
Remember, if you don’t receive a form, the onus is on you to file a return if you are liable for the tax, and if you haven’t received a form by the beginning of April, then you need to contact Revenue.
2 Consider whether you qualify for an exemption
While there is no exemption for those who paid exorbitant amounts of stamp duty during the boom, a number of homeowners will, however, be exempt from the tax.
Firstly, if you buy a new home from a builder or developer that was not lived in previously, you will be exempt from the tax until the end of 2016. This exemption will apply for purchases between January 1st, 2013 and October 31st, 2016.
If you’re a first-time buyer, an exemption also applies if you buy a property by the end of the year – provided that you live in it. If you are purchasing with a spouse/civil partner/co-habitant who isn’t a first-time buyer, you will jointly benefit from this exemption. A co-habitant is someone with whom you have children and have been living together for two years – or five years if there are no children.
Houses in so-called ghost estates are also exempt from the tax, while self-builds constructed after May 1st of this year and before November 1st 2016 will not be liable for the property tax until 2017.
An exemption also applies for pyrite affected homes, while mobile homes, vehicles and vessels are not subject to the tax.