Thousands due property tax refunds in legislation error

Thousands of homeowners are expected to receive refunds on their local property tax due to an unclear clause in the legislation.

Revenue said today that this move was related to a clause in legislation which was originally intended to give an exemption to some first time buyers on second hand houses up to 2016.

“However, read literally, the exemption benefits any buyer, not just a first time buyer,” Revenue said in a statement today.

The body reviewed the legislation and found that “it did not impose a liability to LPT on a non-first time buyer of a second–hand house.”

“The result is that a person who purchases a second hand house and occupies it as a sole or main residence is entitled to the exemption regardless of the fact that they are not a first time buyer,” it said.

Revenue will write to people “as soon as possible” advising them that they may qualify for an exemption. It has attempted to identify those involved by matching their local property tax data with stamp duty records, it said.

Revenue said the exemption was for first time buyers only had been clear in the notes to the legislation and the explanatory memorandum to the Finance (Local Property Tax) Act. However it said the exemption did not apply “notwithstanding the fact that the intention was clear”.

A Revenue spokeswoman was unable to confirm how many people would be involved but said “ indications are a few thousand will receive refunds”.

Fianna Fáil said the Minister for Finance needed to “clarify” whether the effect of the statement was “that any person — whether they be a first time buyer or not — who buys a second hand home between now and the end of the year for the purpose of using it as their family home will be exempt from the LPT until 2016”.

The error was a result of the Government “ramming legislation through”. Fianna Fáil spokesman on finance Michael McGrath said.

The committee stage debate on the Act was “farcical”, he said. The debate took place on December 18th last year and “so anxious was the government to ram the bill through before Christmas that the committee stage was forced through in a matter of hours. Only 2 of the 159 sections of the Bill were even debated,” he said in a statement.

The Government had to “accept responsiblity” for the mistake, Mr McGrath added.

The announcement comes after a week of widespread public criticism that taxpayers paying by plastic card have had to pay the 2013 tax and the 2014 tax within one year.

On Thursday venue chairwoman of the Revenue Commissioners appeared before the Oireachtas Finance Committee to explain the approach of Revenue to the collection of the tax, which was first introduced in July this year.

She stood over the decision to deduct credit and card payments this month for the 2014 property tax on the basis that there are significant risks involved in retaining card details.

This week the Revenue Commissioners extended the ‘paper’ filing deadline for the property tax by a week due to the volume of queries it has received.

Confusion had arisen about the methods of payment after Revenue issued letters offering seven different options, some with different payment deadlines.