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Here's what you needed to know about the property tax

With the deadlines approaching, we asked for your questions about the property tax and here they are answered…

Image: Screengrab via Revenue.ie

EARLIER THIS WEEK we asked for your questions about the property with two separate deadlines looming for filing your return.

Though talk of the tax has dominated the airwaves and taken up thousands of words in print and online media there are still plenty of you who have questions about the specifics of the tax.

We’ve taken all your input and done our best to formulate comprehensive, informative, and, hopefully, helpful answers. For some of you in more unique situations we’ve been on to the Revenue who were happy to help with answering.

So let’s get started….

Q. What happens if I haven’t received a letter, have heard nothing from Revenue and they won’t answer my emails?

If you own residential property and you haven’t received a return you are still liable for the tax and must file a return.

So even if Revenue hasn’t been in touch you should get on to them. You can file your return online by clicking on the ‘I have not received a Property PIN’ tab or you can file online (as Revenue out it) over the phone by ringing 1890 200 255.

Q. Is there any legal challenge to the tax and if there is when is it going to be heard in court?

Attack The Tax claims that it is mounting a legal challenge to the tax but the details of this are unclear and there have been no hearings before the courts about any challenge to the tax to date.

In other words, if you are thinking of not complying because of an impending legal challenge, don’t.

Q. Can Revenue actually take the tax from my bank account or my wages if I don’t comply? Will there be penalties?

Revenue will deduct from source if you do not file your return on time. This means that from 1 July there will be mandatory deduction from employment income, pensions and certain government payments.

The money can also be taken from your bank account if you do not comply and if all these fail your case could be referred to a Sheriff or State solicitor. Revenue says that interest charges of 8 per cent per annum apply to late payment of the local property tax and penalties may also arise.

Q. For people in the process of building their home but who won’t have it completed by the deadline next week, what should they do?

In response to this query, Revenue told us: “If a property is being used as a residential property, regardless of its condition, the owner will be liable for the local property tax. If the building isn’t suitable for as a dwelling on 1 May, then the owner isn’t liable for LPT in 2013.”

Q. How long do we have to pay the tax for?

The tax was brought in by the current government in the last Budget in a bid to broaden the tax base and to impose a tax on property in the same way most countries in Europe do. The Revenue return that you file this time around is valid until 2016 when a new estimate – which will be self-assessed – will be sought.

The likelihood is that under the current government the tax is here to stay. The two main opposition parties – Fianna Fáil and Sinn Féin – oppose the tax with Sinn Féin pledging to abolish it if and when it is in government but that will ultimately be dependent on the outcome of the next election.

The short answer is that the tax is here for the next two-and-half-years at least.

Q. Can you pay the property tax from your wages?

Yes, Revenue can deduct the tax at source i.e. from your wages if you provide them with your employer’s name and their tax registration number (which is on your P60).

Revenue says this payment will be spread evenly over the period between July and December with the amount dependent on the number of wage payments you are due to receive in this period.

Q. One reader asked: “Does anybody know offhand when the ‘percentage rate’ for the LPT was introduced? That is – was it before the Prom Note deal? Only asking because if the ‘rate’ was decided before the deal, it would have the criteria of a different economical situation…”

The Local Property Tax was introduced in the Budget delivered by Finance Minister Michael Noonan last December. He announced at that homeowners will be charged at 0.18 per cent of the market value for houses worth under €1 million and for those houses valued over that amount, they would be charged at 0.25 per cent of market value. There is no scope for these percentages to be adjusted, the government says, at least until there is a new assessment in 2016.

Q. For homes above a shop that is already liable for council tax on that, does that council tax still apply in addition to the property tax on the home?

Revenue told us: “In the case of a property that is used for both commercial and residential purposes, LPT is only due on the residential portion of the property (which itself would not be subject to commercial rates). If a property is fully subject to commercial rates, then it’s exempt from LPT.”

Q. If you pay through your salary spread evenly over the year, do you pay more than if you paid in one lump sum?

There is no extra charge for spreading the payment over a year rather than paying in one lump sum.

Q. What happens if a homeowner accepts the Revenue valuation, files their return based on that and it transpires the house is worth more than that. Will they be fined?

Revenue is at pains to point out that this is a self-assessed tax. You decide the value of your property and what band it falls into, not Revenue. Its estimate is not a demand and you do not have to pay this amount, you pay your own assessment. The estimate only applies if you don’t make your own assessment and send in a return.

A spokesperson said: “Revenue is not valuing individual properties. We don’t know your house – what size it is or what condition it’s in. We have however provided guidance to assist property owners in self-assessing the value of their property.”

It points to its own valuation guidance on its own website, the Property Price Register and in other website such as Daft.ie

“All of these sources are intended as a support to help you self assess,” the spokesperson said. “If your property has unique features, is smaller or larger than the average for the area, is in a significantly poor state of repair or has exceptional features, you should factor those in. The banding system removes the need for precision in relation to the market value

“Once you assess the value of your property honestly and reasonably, your valuation will be accepted. That’s the way self-assessment works for other taxes and LPT is no different.”

Q. Why have you not mentioned the nationwide campaign against the property tax?

Q. I rent my house from the council but I still got a bill from Revenue. I have ignored the letter, do I need to do anything?

The local authority is liable for the charge in the same way that a homeowner is for their own home. If you get a letter and you are a tenant then you should inform your landlord of this.

Revenue says that you should inform them within 30 days of receiving the letter from Revenue and provide details – names, address, and PPSNs  - of the liable persons, the reasons why you are not liable (i.e. you are the tenant, not the owner) and supporting proof such as the lease agreement with the landlord/council.

Revenue underlines that it is important to contact them about this. Not contacting them makes you liable.

Q. If it goes beyond 30 days since a received a letter and I’ve not contacted Revenue, what should I do?

Still get in touch with Revenue. Don’t continue to ignore it if you want to do something.

Q. Which of the available payment options will not incur any service charges?

If you pay in one lump sum or opt to have the payment deducted at source you will not incur fees. Paying by cash at Post Offices will incur fees as will payments online by credit and debit cards (bank fees). A full break down is available here.

Q. On reader asked: “My property tax form does not say how much I owe also and says I’m the owner of more than one property, which I’m not. What do I do?”

Revenue said: “Because there was no existing complete property register, there will be some errors in our records and a very small minority of individuals will receive a letter in error. In the case you’ve described, it’s most important that the individual contacts Revenue immediately so that we can correct our records. Otherwise, we will continue to connect them to that property and will come looking for the tax.”

Q. What if you rent a house? Who pays the tax – the landlord or the tenant?

The landlord.

Q. A reader asked: “The contract for the sale of my home has been signed by the purchaser. The closing day is set for 11 May 2013. I have sent an e-mail to Revenue asking for guidance on whether I am responsible for the tax on a home I will no longer own but they have not replied and the local authority were unable to address my query. We move from our home this week-end to rental property. I plan to use the online system as I have other properties but can you answer my inquiry?”

In simple terms, you became liable for the property tax from 1 May which means that you will be responsible for paying the property tax on this property irrespective of the transfer of ownership on 11 May.

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About the author:

Hugh O'Connell

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