Insights

Reminder — Have You Paid Your Local Property Tax?

REMINDER — HAVE YOU PAID YOUR LOCAL PROPERTY TAX?

The deadline for payment of local property tax (“LPT”) occurs on 1 July 2013.  Note that in the event of late payment of LPT an interest charge on a daily basis of 0.0219% per day applies (equivalent to 8% per annum).  For anyone who has not paid the household charge for the year 2012, this will be added to the LPT liability and converts that outstanding household charge to LPT so that it can be collected under the LPT system.

WHO IS LIABLE TO PAY LPT?

  • Owners of residential properties including rental properties.
  • In the cases of leases of more than 20 years, life tenancies and other long term residency arrangements the occupant will be liable for LPT.
  • In the case of short term leases the landlord will be liable for the LPT.
  • Where an owner is deceased the personal representative will be liable for the LPT.

WHAT EXEMPTIONS EXIST FROM LPT?

  • Newly constructed, unoccupied and unsold residential properties built between 1 January 2013 and 31 October 2016.
  • Properties subject to commercial rates.
  • Mobile homes, vehicles and vessels.
  • Accommodation owned by a public body/charity and used to provide accommodation to people with special housing needs such as the elderly or disabled.
  • Where a principal private residence is unoccupied due to long term mental or physical infirmity
  • Designated unfinished housing estates.
  • Residential property held by a charity which is used for recreational activities in carrying out the main purpose of the charity.
  • A residential property purchased or adapted for use as the sole or main residence of a permanently incapacitated individual.  The cost of adaption must exceed 25% of the chargeable value of the property before it was adapted.
  • Pyrite damaged homes.
  • Registered nursing homes.
  • Second hand properties purchased by a first time buyer between 1 January 2013 and 31 October 2016 will be exempt until 31 December 2016.

HOW WILL THE TAX OPERATE?

  • LPT is administered by Revenue Commissioners who have at this stage compiled a national database based on the returns filed.
  • Electronic and paper returns were due with Revenue Commissioners by latest end May 2013.

HOW MUCH WILL THE LPT BE?

  • This is assessed on market valuation in various bands.
  • The rate applicable to properties up to a value of €1 million will be 0.18%
  • The tax will be calculated at the mid point of the applicable band.
  • Properties valued at over €1 million will have a rate of 0.25% applied on the value above €1 million.
  • There are a number of ways in which the LPT can be paid including deduction at source for PAYE workers/ those in receipt of state pension/benefits.
  • In the event of default Revenue can direct an employer to deduct LPT at source from PAYE worker.
  • Interest will apply to late payments with effect from 1 July 2013.

WHAT HAPPENS TO HOUSEHOLD CHARGE/NON PRINCIPAL PRIVATE RESIDENCE (NPPR) CHARGE?

  • Household charge has been abolished effective from 1 January 2013.
  • Any arrears of Household charge will be converted to LPT and continue to attract interest until paid.
  • NPPR charge will apply for 2013 and will be abolished on 1 January 2014.

EVIDENCE REQUIRED IF YOU ARE SELLING A RESIDENTIAL PROPERTY:

  • If you are selling a NPPR you must produce certificates of clearance/exemption for the years 2009, 2010, 2011, 2012 (and 2013 when it falls due).
  • Certificate of clearance/exemption from household charge for year 2012.
  • Confirmation from Revenue Commissioners of payment of LPT
  • Copy return (penalty of €500.00 applies if the relevant documentation is not produced)
  • Note that a new owner must make a return if it appears to him that the chargeable value declared by a purchaser for LPT is not a value which could reasonably have been arrived at.


For further information on the operation of the LPT please check www.revenue.ie or contact Roisin Bennett at rbennett@reddycharlton.ie or any other member of our property team on 01 6619500.


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