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Dublin: 21 °C Thursday 24 July, 2014

Property tax: Seller faces €500 fine if they under-declare value of home

A buyer who discovers that the person who sold them the house under-declared its value when paying the tax will be required to inform Revenue which will then pursue the seller, the Department of Finance said.

Image: Peter Morrison/AP/Press Association Images

A PERSON WHO has sold their home will face a €500 fine if they have not disclosed to the buyer the value that was put on the property when the local property tax was paid, under new measures announced yesterday.

Homeowners who find out that the seller was under-declaring their property value for the purposes of paying a lower amount of the new tax must inform the Revenue Commissioners as soon as they become aware of this.

The Department of Finance issued a statement yesterday evening in response to what it said were a number of “inaccuracies in some reports” about changes to the property tax that were announced yesterday.

A spokesman acknowledged that there may be a reason other than “deliberate under-declaration” that the sale price of a house is higher than the value declared when the property tax was paid.

A spokesman said: “[For example] A general increase in property prices, or improvements in facilities close to the property.

“The purchaser is only obliged to file a return if, in the purchaser’s opinion, the chargeable value declared by the seller could not reasonably have been arrived at.”

The Department said that if a property has been undervalued then Revenue will pursue the seller for the outstanding tax due but emphasised that the shortfall is a matter “entirely between the Revenue and the seller”.

No impact on the purchaser

“[It] has no impact on the purchaser,” the spokesman said.

“The only obligation on the purchaser as a result of this provision is to submit a return to Revenue, on or before the next liability date, where no reasonable explanation can be provided for the difference between the market value and the value that the seller had placed on the property for Local Property Tax purposes,” he added.

The measure was one of a number of changes to the property tax – which comes into effect on 1 July – contained in the Finance Bill, published yesterday, which gives effect to many of the changes announced in last December’s Budget.

Other changes include people being able to defer payment if they can demonstrate that they have suffered a “significant and unexpected” financial loss and would be unable to pay the tax without “excessive financial hardship”.

People who enter a formal insolvency arrangement will also be able to defer payments for the duration of the insolvency period.

There is also a three-year exemption from the tax for property damaged by pyrite while properties owned by local authorities and approved housing bodies will go into the lowest valuation band of €100,000 for the next four years.

More: Pyrite homes, disabled accommodation to receive Property Tax exemption

You asked, we answered: What you wanted to know about the property tax

You asked, we answered: What you wanted to know about the property tax (pt 2)

Plus: The table which shows how much property tax you’ll have to pay

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