No axing the taxing issues
We can weep, wail and feel aggrieved, but given that the Revenue Commissioner and his team now have powers to rake the money directly from our PAYE cheques, bank accounts, welfare and even farm payments — the fight is all but over.
As part of the mainstream taxation machine there is simply no avoiding the LPT for the vast number of Irish house owners and even for some long term tenants.
Anyone who has failed to pay the comparatively modest Household Charge by July, when the property tax comes into effect, will see the amount outstanding automatically doubled to €200 and attached to their bill for the LPT.
If you’ve been peeking through your fingers at the enfolding horror of yet another domestic demand, here are the basics you really do need to know.
The tax is a tiered into value bands, and once settled will apply to the property for the next three years (until December of 2016) regardless of market forces or improvements.
The rate is based on an assessed value, with an annual LPT payment of .18% for the first million and 0.25% on the actual value (not a banded value) over €1,000,000. For homes worth less than €100,000, a flat rate of €90 is payable. This year, we are only due to pay the LPT from July until December, so the tax will be half its annual figure for 2013.
The value of your house is taken at the mid-point of your valuation band, so for example if your house is valued at €230,000, the mid-point of the relevant €200,000-€250,000 band is €225,000.
The value of each house needed to set the LPT is self assessed, that is the property owner is responsible (and culpable) for establishing the value of the house in May 2013 for taxation purposes. In March you will receive a letter, form and information booklet from the Revenue Commissioners as an introduction to your LPT. It may include an ‘indicative property value’ for your house.
This is not set in stone, but is a suggested starting point, and it’s debatable how much real use the assessed value will be without an individual visit. Assessment is presumably based on the Irish Property Register managed by the Property Services Regulatory Authority (www.propertypriceregister.ie).
This is a flabby place to start as it records only the recent sale prices of homes in the area.
This is fine if you happen to live in a standard semi-d in a popular estate, but completely useless for one off housing and the peculiarities of most period and highly individual second-hand homes.
Getting the valuation right is vital, and knowingly placing a low ball figure on the house to lower the tax bill, could leave you with a fine up to €3,000 to contend with.
The Commissioners cannot challenge their own valuation obviously, so if a supplied ‘indicative value’ seems correct based on similar homes in the area, you can base your payment on their figure.
There’s an LPT calculator provided by Revenue online to help you work out your liability. www.revenue.ie.
If you don’t accept the Revenue’s indicative value included in your LPT letter in March, and it doesn’t have to be any tighter than a €50,000 margin, it’s up to you to employ a professional valuer to set a value on the house by May 2013.
This is a valuation, not a structural survey, and therefore far less invasive and demanding. Paying for the valuation may seem like extra hassle and expense (in the area of €150). It does mean that Revenue cannot challenge the valuation and it stands for the next three years. March to May is not a long period, so get moving on a valuation if you need professional help to ensure your forms are returned by the deadline of May 7.
If you don’t file the form, the Revenue’s estimate will automatically become payable.
Even if you’re sent a form in error, get in touch immediately. If you file your LPT form online at Revenue Online, you have until the May 28. Phased or single payments then begin in July 2013, depending on your choice.
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