Property tax: how much will I have to pay now?

With house prices rising, many owners are wondering exactly how much their property is actually worth

The national average house price in 2013 was €189,000, rising to €284,000 this year

The national average house price in 2013 was €189,000, rising to €284,000 this year

 

Property owners will have to revalue their house in November to be assessed for the revised local property tax (LPT) system.

With huge rises in house prices since the last valuations when the tax was introduced in 2013, many owners are left wondering exactly how much their property is actually worth.

I can’t even remember what my last property valuation is?

Property owners can check all their LPT details, including the existing property band and valuation, through Revenue’s MyAccount, ROS and LPT portal online services. You will need a Personal Public Service Number (PPSN) or tax reference number, as well as your unique property ID and secure PIN code to use the services.

My house will surely have gone up in value since it was last determined in 2013?

“It would be difficult to find a house that hasn’t increased in price since then,” says Angela Keegan, managing director of online property sales website MyHome.ie.

“Prices went up significantly in 2014/2015, then they cooled. After the outbreak of the pandemic – late last year, early this year – and particularly in the first-time buyer market, there has been an increase again in prices.”

The national average house price in 2013 was €189,000, rising to €284,000 this year. Over the same time, average prices soared in Dublin from €249,500 to €360,000, in Cork from €195,000 to €255,000, in Limerick from €140,000 to €210,000, and in Galway from €170,000 to €275,000.

So, how do I work out the new value of my property?

There are a number of ways. If you just want an idea for now, have a look at the prices of neighbouring properties that are either up for sale on the likes of MyHome.ie, or which sold recently and are listed on the property price register (propertypriceregister.ie).

If nothing nearby is for sale or has sold recently, a call to your local estate agent, should they oblige with an estimate over the phone, will also give you a sense of the price bracket, says Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers. Otherwise you could hire a professional valuer.

A valuer sounds costly?

It shouldn’t be necessary in most cases – only where the value of the house might border between differing bands. Davitt says many auctioneers and valuers gave special rates in 2013 and he was “sure they would do that again”. Owners could expect to pay from around €100 (including VAT) for lower priced properties. “It mightn’t be that expensive if it was the difference between you paying, say, €315 or €405 a year property tax,” says Davitt. “It might pay for itself in the first year.”

Are there any other ways of valuing my property?

Revenue launched an online interactive property valuation guide in 2013. It assigned average market values of properties in a given locality, with an indicative valuation band for properties depending on type, age and location. It does not provide market values for individual properties. Revenue says it expects to have a similar updated system before the next round of valuations in November. If property owners do not give a self-assessment, Revenue will rely on this guide to assign a value to your property.

Are there any good reasons why I might argue my property is valued lower than my neighbour’s?

Yes, there are, but they would have to be deemed acceptable by Revenue. House values are worked out on any particular day by what is comparable in the open market. Some reasons that your property may be of a lower value could include that it has not been maintained to the same standards as neighbouring properties, it needs new plumbing or wiring, for example, or maybe the windows are old and need modernised. “Your neighbour might have a swanky new kitchen or a gravel drive and garage when you don’t, which would also add value to their house,” says Davitt.

What happens if I undervalue my property?

Revenue says the “overwhelming majority” of property owners pay what they owe in property tax. By the end of last year, for example, less than 1 per cent of owners had their property tax increased. Revenue reviews self-assessments and will challenge where they disagree with them.

How often does this happen?

Last year Revenue issued 39,400 compliance letters, covering underpaid or unpaid property taxes dating back the last eight years.

“In the vast majority of these cases property owners fully complied with their LPT payment obligations, either on a phased basis or by way of a single payment,” a Revenue spokeswoman said.

“However, there was a relatively small number of cases that chose to remain non-compliant even after significant effort on Revenue’s part to engage with the persons concerned, which left Revenue with no alternative but to deploy debt collection/enforcement measures or other sanctions to ensure payment.”

What are the other sanctions?

Revenue collected property taxes owed through mandatory deduction at source from salaries and pensions for around 86,700 properties last year. More than 14,900 property valuations have been increased after an owner corrected their returns or when Revenue challenged it, just over 800 of them relating to last year. Also, more than 12,300 tax clearance requests were refused last year on foot of LPT non-compliance, while 10,740 Income Tax and Corporation Tax surcharges were imposed.

In the vast majority of cases the issues are resolved, but in a “small number of cases” the sheriff or solicitors are called in to collect outstanding amounts.