RYAN & HICKEY

CHARTERED ACCOUNTANTS & REGISTERED AUDITORS

Local Property Tax

 

Am I liable to the pay the tax?

Simply put, the owner of a residential property in the State pays the tax. You are liable to the tax regardless of whether you live in Ireland or not. All residential landlords are liable to the tax, unless a long term lease (over 20 years) applies to the property. Holders of a life interest, or long term (over 20 years) right of residence are also liable to the LPT. Trustees and personal representatives (the executor or administrator of an estate) are liable where residential property is held within a trust or estate.

There are a number of exemptions from the LPT but generally the Revenue require that you submit a return indicating which category of exemption applies, and evidence where applicable to support the claim for exemption.  It is important to note that the LPT does not apply to properties that are not habitable or derelict.  Photographic evidence should be sent to Revenue with a return (where appropriate) to back up your claim.

If the property is owned jointly, the Revenue state that only one return is required per property and that the owners should agree on which owner makes the return. It is not clear as to how Revenue will deal with the LPT where there is a dispute in relation to jointly owned property, for instance where only one person remains in the marital home following separation. However, Revenue have stated their right to collect the LPT from any of the owners. We would suggest that you contact the Revenue if you are having difficulty in agreeing on the payment of the tax with co-owners of the property.

Valuing my Property

The LPT is a self assessed tax and it is up to the taxpayer to determine the value of their property. With such uncertainty in the residential property market, it is extremely difficult task to value property. And if the Celtic Tiger years proved anything, it’s that we are not very good at valuing property! Latest figures from the CSO are that property prices outside Dublin are down on average 49% from their peak in early 2007.

Revenue suggest that you can use The Property Price Register (www.propertypriceregister.ie), a competent professional valuer or asking prices from estate agents/ property websites to inform your valuation.

Remember that the valuation of your property should include the house, any outbuildings (garages/sheds) and grounds/gardens of up to one acre.

The value you put on your property at May 1st 2013 will apply for the purposes of the LPT until 2016. Any improvements that you make to the property during this time will not affect you LPT for those years.

If you believe that the valuation of you property is open to question, we would recommend that you back up your valuation with as much evidence as possible. For instance, if your valuation has been impacted by the poor condition of your property, document this with relevant photos. The bottom line is that you need to arrive at a valuation that you are comfortable with in terms of the evidence that you can produce to back it up.

Self Employed and the LPT

For the self-employed there are important considerations for non-payment of the tax. The LPT will be treated in the same way as other taxes and non-payment of the tax or failing to submit a return will have the same consequences. These include the non-issue of tax clearance certificates, withholding of other taxes to cover unpaid LPT and a surcharge for the late submission of the return.

NPPR – not gone yet

It’s worth noting that in addition to the LPT, the NPPR continues to apply in 2013 but no longer applies from 2014 on. So if you are the owner of more than one residential property you are facing a double whammy. Liability for the 2013 NPPR depends on the status and ownership of the property at 31/03/2013 and must be paid by 30/06/2013

Ryan & Hickey provide tax advice to clients throughout the South East, including Wexford, Kilkenny, Waterford, Carlow and Tipperary. 

The information contained in this article is purely informative and should not be taken as professional advice from Ryan & Hickey. Please refer to our website Terms & Conditions.

If you would like specific advice on any of the areas mentioned in this article, please contact us