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Finance - Money Matters - Your guide to the new local property tax

Your questions answered by Ivan Ahern

By now you should have received correspondence from Revenue outlining the details of the local property tax (LPT) that comes into effect from July 1, 2013. This tax is payable for the second half of 2013 only, and for a full year thereafter.

The LPT is a tax payable on the market value of residential properties (up to one acre of land) in Ireland, where commercial rates are not payable. It is payable by both owner occupiers and landlords and will be administered by Revenue. This is a self-assessed tax, which means you will be responsible for calculating and paying your own tax liability based on Revenue guidelines.

We have summarised the main points of the LPT for you below:

As a liable person, what do I have to do?

If you are the liable person in respect of the property, you are responsible for completing and submitting the return and paying the tax due. To complete your return, follow these four steps:

  • Decide the current market value of your property
  • Identify the valuation band and calculate the LPT due
  • Select your preferred payment option or check to see if you qualify for a deferral or exemption
  • Submit the completed return.

If Revenue do not send you correspondence regarding the property for which you are the liable person, you are still required to submit a return.

The value is based on the market value of your property on May 1, 2013. This valuation covers your property value for the years 2013-2016. Revenue will issue you with an estimated value of your property based on age, size and location. This is provided as a guide only, and you may seek an independent valuation or consult the register of residential property sales on www.propertypriceregister.ie for further guidance.

The rate of the LPT is 0.18% for properties valued at less than €1 million. A rate of 0.25% is payable on any property valued at over €1 million. The amount payable is set out in Revenue’s valuation bands, which start from €0-100,000 and increase by bands of €50,000 up to €1 million. No bands apply for properties valued at greater than €1 million. You are then taxable on the mid-point of that valuation band.

This is best explained by an example.

  • Valuation of your property is: €220,000
  • Your property falls within the following band: €200,000-250,000
  • You are taxable on the mid-point of that band, which is: €225,000
  • Therefore, the tax payable is €225,000 x 0.18% = +405 per year (€202 for 2013).

Filing date
If you are filing your LPT by direct mail (paper form), this must be filed by May 7, 2013. Paper filing is only available to people who own no more than one property, and who are not already registered to file for tax online. An extension to the May 28 deadline can be availed of if you choose to file online.

Payment is due from July 1. Revenue will accept full payment through various payment methods. If you wish to make the payments in instalments, this may be arranged through salary or direct debit payments.

There are some exemptions to the LPT. Properties exempt from LPT include:

  • Properties purchased after January 2013
  • Properties for some first-time buyers
  • Mobile homes
  • Properties constructed and owned by a builder or developer that remain unsold and that have not yet been used as a residence
  • Properties in unfinished housing estates (commonly called ‘ghost estates’), specified by the Minister for the Environment, Community and Local Government.
  • Properties that are certified as having a significant level of pyrite damage in accordance with regulations to be published by the Department of the Environment, Community and Local Government
  • Registered nursing homes.

For more information, please log on to www.revenue.ie

Ivan Ahern, Director, Cornmarket Group Financial Services Ltd.

This information is intended only as a general guide and has no legal standing. Members who have specific questions relating to their personal finances, Superannuation entitlements, etc. are advised to seek professional advice and can contact Cornmarket at (01) 408 4000. Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. Telephone calls may be recorded for quality control and training purposes.

Finance - Money Matters - Your guide to the new local property tax


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