How to value your farmhouse for the Local Property Tax
A property owner is expected to include in their valuation all outbuildings and curtilage of up to one acre with the property. Picture iStock
This year marks the first review in Local Property Tax since 2013. In the intervening years since 2013, residential property owners simply needed to pay the LPT charge based on their original valuation in 2013. The charge varied from year to year as county and city councils gained a degree in autonomy in setting the rates, but the rates have through the years been linked back to that 2013 valuation.
This year is different, in that property owners are being asked to reassess their property valuations.
Some people will feel more comfortable obtaining a professional valuation from an auctioneer. However, the Irish tax system which is based on self-assessment does not insist on such services being employed. Property values have moved up significantly since 2013, and it is likely that many properties will have doubled in value compared to what was originally declared at that time. The newer valuation bands which are set in place for 2022 do take cognisance of the uplift in valuation, and the Local Property Tax charge applicable to each new band is geared down by comparison to what would have applied under the old system for an equivalently high valuation.
For example, a house in the €300,001-€350,000 bracket in 2013 would have faced a standard LPT charge before local authority adjustment of €585, whereas a house valued for LPT 2022 in the €525,000-€612,500 bracket carries the same charge of €585. Many houses built over the past eight years also escaped the LPT charge as an exemption for new homes and homes acquired from ghost estates gave these homeowners a reprieve from the LPT charge. These homeowners will now become subject to the LPT charge for the first time.
To meet your LPT obligations for 2022, you need to do three things:
1) determine the market value of your property at 1 November 2021, this valuation will determine the LPT charge for the four years 2022-2025
2) submit your LPT Return, including your valuation, by 7 November 2021, and
3) pay or make arrangements to pay your LPT charge for 2022.
With regards to valuing your property, Revenue suggests that a taxpayer can take guidance from their own interactive valuation tool available on the revenue.ie where you can enter your eircode, which in turn will produce a map showing what the average property valuation band is for that general area.
For the purposes of the valuation, a property owner is expected to include in their valuation all outbuildings and curtilage of up to one acre with the property which is of most use and enjoyment. In valuing a farmhouse, farmers need not include in their value any farm buildings normally associated with the farming enterprise even if such buildings fall within the one-acre adjacent to the residential property.
If your property is not a residential property on 1 November 2021, then it will not be liable for LPT for the year 2022. Similarly, a property that is not suitable for habitation is not liable to the LPT charge.
- Revenue has detailed some factors which should be taken into account when assessing if a property is suitable for habitation.
- Is the property structurally sound?
- Has any of the property collapsed?
- Is the inside of the property exposed to the elements?
- Does the property have a sound roof?
- Does it have sanitary facilities?
- Does it have a water supply?
- Does it have an electricity supply connected?
A water supply or electricity supply that is simply turned off or temporarily disconnected does not mean that a property is considered unsuitable for use as a dwelling. If the property was previously liable for the LPT and the property owner now wishes to claim an exemption from the LPT charge they should contact Revenue with supporting documentation (engineers report, pictures etc) in order to get the property removed from the LPT charge).
Conversely, for properties that were not liable for the LPT charge due to being unfit for habitation, and have been made suitable for habitation in the intervening period since 2013, the property owner should apply for a property ID and pin number.
A limited number of exemptions apply from the LPT charge to include houses that are unoccupied for at least 12 months or more due to the property owner having long term physical or mental infirmity or illness. Property owners who are long term residents of nursing homes should fall into this category.
Interestingly, a carve-out was given to encourage the use of such properties, with the following guidance issued by Revenue; ‘This exemption does not apply if your sole or main residence is occupied, in your absence, by another joint owner or liable person. If there is more than one owner of your property, all of the liable persons are required to meet the conditions for the exemption. However, this exemption is still available where the property is occupied by a person who is not a joint owner, such as a tenant, a relative or a friend. where the property is otherwise unoccupied.’
In summary, all residential property owners should bring themselves up to speed on their requirement to update their LPT records ahead of the 7th November deadline.
