New guide to local property tax

The Irish Tax Institute and the Society of Chartered Surveyors of Ireland have just launched a comprehensive guide to local property tax.

The guide is a one-stop-shop for understanding how local property tax works, including details on how property tax is calculated, who is liable for the tax, when the tax must be paid, and the options for Revenue enforcement in the event of failure to lodge a return.

The guide gives particularly useful detail on how property should be valued.

It goes on to explain that property tax is based on the “chargeable value of a property”, which in most instances is a simple reflection of the market value.

In some instances, a property’s market value might be reduced due to restricted access, or if the property is owned by one person but occupied by another person who has a right of residency.

The local property tax must be calculated ignoring any such restrictions, to comply with the definition within the local property tax rules, which assumes that a property has good title, with no restrictions, and full access is available to the property.

Where a property is surrounded by more than one acre — be it yard, land or gardens — the value is calculated based on the value only up to and including the first acre.

How is property valued for the purposes of the local property tax? In short, the tax is supposed to operate under self-assessment rules, and therefore it is your own responsibility as to how to value your property.

The values included in the initial correspondence from Revenue should be looked at as estimates of the average values of properties in your area. Your property may have unique features which cause your property value to be higher or lower that this Revenue estimate.

Generally speaking, most people will be able to assess the value of their property themselves, by referring to the information already available.

The characteristics you should consider when valuing your property, and indeed in comparing your value to the average value within your area, include the following:

Location and proximity to local services.

Size of the property.

Layout of the property.

General condition of the property,

Property specification.

The decoration of the property.

The availability of parking.

Annual service charges (such as management fees in an apartment complex).

The aspect of the garden (for example, south facing).

Proximity to any eyesores (electricity pylons, landfill etc).

Not all of these factors will be relevant, and indeed, some factors may carry a greater weighting than others, but the guide reminds us that it should be possible to self-assess your own property value.

Indeed, Revenue suggested that they left the gap between the different tax bands wide enough in order that tax payers would have room for margin of error.

Of course one can avail of the services of a professional auctioneer/valuer, to assist in the valuation of your property.

In filing your return, the value which you choose now will remain the taxable value for the next three years, and if you are availing of the services of a valuer, at least the cost can be weighed up against surety of your property value over the coming three years.

Remember the filing deadline for paper returns is May 7. Those who choose to file online or those who must file online, such as landlords with multiple properties and those who are already online filers, have until May 28 to lodge their online return.

Payment of the tax must be made by July.

This useful, independent and comprehensive guide is available online from the Irish Tax Institute and the Society of Chartered Surveyors of Ireland.

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