Revenue defends valuation guide after criticism

The Revenue Commissioners have defended their method of calculating house prices in advance of this summer’s property tax amid criticism that their valuation guidelines do not reflect market reality.

As growing opposition to the tax mounts, Keith Walsh, architect of the Revenue’s website, said yesterday that its online guide to home values would be helpful for many people in assessing what they will have to pay.

The guide is designed to help home owners estimate what tax band their property falls into. People will begin to receive letters this week detailing the amount of tax owed.

However, the guide, which is based on electoral districts, has thrown up some bizarre calculations. In one instance, Lotamore House in Cork, on sale for €1.3m, is classed as coming under the guideline’s valuation band four, and worth less than €200,000.

Every pre-2000 detached home in Kilkenny, both urban and rural, is valued at between €150,000-€200,000, regardless of location, site size, facilities or the number of bedrooms.

In Dublin, one Blackrock property, on sale for €1.3m, attracts a value category of between €500,000-€550,000 on the website.

“The average price may not be right for every property,” said Mr Walsh. However, he insisted the guide would still provide a useful tool for many homeowners in calculating their tax liability.

Mr Walsh said Revenue had established a “reasonably good example of the Irish property market at the current time”.

“For someone, say, living in a modest house in a high-end area, it will still be useful. If there are reasons for the lower value, you can work downward from there.”

However, he said that, as a self-evaluation tax, the responsibility for supplying an accurate house evaluation ultimately lay with the home owner.

Mr Walsh said Revenue had built up what he described as a “training data set” of 36,500 properties sold since 2010.

“We know the characteristics of those properties and how much they sold for,” he told Pat Kenny on RTÉ radio.

“When people start making returns to us in May that will be a powerful set of information and will help enhance our guidance.”

Property website Daft.ie has criticised the guidelines. Economist Ronan Lyons says the value is only based on property type, which presents a number of problems. “They don’t have key information, for example the number of bedrooms, for every property in the country or square meterage. That presents a number of issues, not just in Dublin where values can vary hugely in a short distance, but also in other parts of the country.”

The Campaign Against Home & Water Taxes also criticised the guide, saying there were major faults in the site’s methodology.

“The Revenue Commissioners and the Government are trying to cod us that this website gives us a measure of ownership over the process and an aura of fairness,” said Michael O’Brien on behalf of the group.

“It appears that the Revenue website is a very blunt instrument indeed, capable only of operating on the basis of average values spanning a handful of categories spread over wide areas leading to major over and under valuations in many cases.”

The property tax comes into effect from Jul 1. The tax is paid on the market value of a residential property.