The New Property Tax which will be coming into effect is known as the “Local Property Tax” (LPT). This tax will be charged on all residential properties in the State and will come into effect from 1 July 2013. It will be administered by Revenue and a half-year charge will apply in 2013.
All owners of Irish property will be liable for this tax, regardless of what country they are living in. If you are a tenant who is renting property you will not be liable unless you hold a long term lease of a residential property which is classified as 20 years or more. However if someone occupies the property on a rent free basis and without challenge to that occupation, then the onus is on them. If you are living in social housing, then that organisation or local authorities will be responsible for paying the tax. Also if a property is held in a trust then the trustee is responsible for paying. There are also certain exemptions such as Properties constructed and owned by a builder or developer that remain unsold and have not yet been used as a residence and properties in “Ghost Estates”. The Revenue website will detail further exemptions.
Once we have clarified who is responsible we need to discuss how the tax is calculated and paid. Revenue will issue a LPT Return to residential property owners in March 2013 for completion. You will be obliged to value your property, calculate your LPT liability, confirm your payment option and submit your Return by the relevant deadline which is in May. Revenue will not be valuing the property, this is up to you and it is based on the Market Value on 1st May 2013. However they will have guidelines on their website which will aid you with the valuation. Once you are happy with your valuation, that value will be used to calculate the tax. The rate of LPT will be 0.18% for properties up to a market value of €1m. Residential properties valued over €1m will be assessed at the actual value at 0.18% on the first €1m in value and 0.25% on the portion of the value above €1m.
Once you have your liability calculated you now need to pay the tax. You can opt to make one single payment or opt to phase your payments in equal installments from 1 July 2013 until the end of the year. You can pay by postal order, cheque, credit card, laser, bank draft, cash payments, deduction at source from scheme payments received from the Department of Agriculture, Food and the Marine, from deduction at source from certain payments or from your salary or occupational pension.
Should you have any questions regarding any of the above log onto the Revenue website www.revenue.ie. Also there will be a leaflet issued to each home over the coming weeks which will provide you with more information.