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Tuesday, 5th Mar, 2013
New Local Property Tax 2013

Local Property Tax (LPT)

The Local Property Tax (LPT) will come into effect from 1 July 2013 with a half year charge applying for 2013. The LPT will be administered by the Revenue Commissioners. The main features of the Local Property Tax are as follows:

1. Liable Persons

Owners of residential properties, including rental properties, will be legally responsible (“liable persons”) for payment of the tax.
The liability will rest with the tenant in the case of long leases (over 20 years) or life tenancies.
Co-owners will be jointly and severally liable for the tax.
During March 2013, information will be sent by the Revenue Commissioners to liable persons advising them of their obligations in relation to the LPT and how to comply.
2. Assessment System
The Local Property Tax will operate through a system of self-assessment and self-declaration by liable persons.
The Revenue Commissioners will have responsibility for all administration, collection, enforcement and audit aspects of LPT.
Normal Revenue enforcement and collection procedures will apply to the LPT.
3. Basis of Assessment
The market value of residential properties will be the basis of assessment for the tax.
There will be a system of market value taxable bands (see Table 1, page B25):
The initial band covers €0-€100,000.
Then bands of €50,000 width up to €1,000,000 in value thereafter.
The tax liability will be calculated by applying the tax rate to the mid-point of the band.
Houses valued over €1m will be chargeable to LPT on their market value, with no banding applied.
4. Valuing Property
Liable persons will self-assess the market value of their property.
Where Revenue guidance about valuing a property is followed, property valuations will not be challenged by the Revenue Commissioners.
The initial valuation is valid up to and including the year 2016.
5. Rates
For the first 18 months (up to 31 December 2014) the national central tax rate will be 0.18% up to €1 million and 0.25% on excess value over €1 million.
From 1 January 2015 local authorities will have discretion to vary the LPT rates by +/-15% of the national central rate.
The national central rate will not be increased for the lifetime of the Government.
6. Payment Methods

The LPT may be paid in full by a Bank Single Debit Authority or by Debit/Credit Card. Alternatively the tax may be paid by instalment through deduction at source, direct debit or by cash payments. Liable Persons may choose from the following payment options:
Deduction at source from salary/occupational pension or certain payments from the Department of Social Protection, the Department of Agriculture, Food and Marine
Direct Debit • Bank Single Debit Authority • Credit Card/Debit Card • Cash Payments through certain service providers
7. Compliance
The Revenue Commissioners are developing a comprehensive register of residential properties in the State. It will contain approximately 1.9 million properties.
During March 2013, information will be sent by the Revenue Commissioners to liable persons advising them of their obligations in relation to the LPT and how to comply.
In the absence of a return the Revenue Commissioners will pursue collection of an estimated amount of LPT, which will have been notified to the taxpayer.
In the absence of a return or an election by the taxpayer for a particular method of payment, as far as possible, deduction at source will be the default means of collection.
In the case of the self-employed, the Revenue Commissioners will not issue a tax clearance certificate where there is unpaid LPT. Late delivery of an LPT return will be linked to the filing of an income tax return, thus exposing a self-employed taxpayer to the penalty of an income tax surcharge.
Where LPT remains outstanding, a charge will attach to that property. This charge will have to be discharged on the sale/transfer of the property.

Certain properties will be exempt from assessment. These exemptions largely correspond to exemptions from the Household Charge, and include:
Newly constructed but unsold residential property
Where ownership is vested in a public body or an approved charitable body and used to provide accommodation to people with special housing needs such as the elderly or people with disabilities
Where a principal private residence is unoccupied by reason of long term mental or physical infirmity
Mobile home, vehicle or a vessel
Property fully subject to commercial rates
Houses in certain unfinished developments as prescribed by law
Properties enjoying protection in other legislation – diplomatic or similar property
New exemptions will apply in the case of:
New and previously unused properties that are purchased between 1 January 2013 and the end of 2016 will be exempt until the end of 2016.
Second-hand property purchased by a first time buyer between 1 January 2013 and 31 December 2013 will be exempt until the end of 2016.

However, local authority housing and social housing will not be exempt unless it is provided to people with special housing needs such as the elderly or people with disabilities. Liability will rest with the local authority or social housing organisation as owner.
9. Deferrals
A system of voluntary deferral arrangements for owner-occupiers will be implemented to address cases where there is an inability to pay the LPT under specified conditions:
Where the gross income does not exceed €15,000 (single) and €25,000 (couple)
For income stressed owner-occupiers who have an outstanding mortgage, an adjusted gross income limit will apply – where gross income less 80% of mortgage interest falls below €15,000/€25,000 a deferral option will be available up to the end of 2017 (when mortgage interest relief also ends).
Marginal relief will apply for owner-occupiers where the income or adjusted income is €10,000 above the income limit (€15,000/€25,000) to permit deferrals of up to 50% of LPT liability.
Interest will be charged on deferred amounts but at a lower rate (i.e. 4% per annum) than the rate charged in default cases (i.e. 8% per annum). The deferred amount, including interest, will be a charge on the property. Deferred property taxes and interest will have to be discharged on the sale/transfer of the property.
10. Local Authority Funding
Revenue from the LPT will support the provision of local services.
Internationally, local services are administered by local authorities and financed by local service charges.
In Ireland, local authorities are responsible for, among other services, public parks; libraries; open spaces and leisure amenities; planning and development; fire and emergency services; maintenance and cleaning of streets; and street lighting. These facilities benefit everyone.
11. Household Charge/Non-Principal Private Residence (NPPR) Charge
a. The arrears of the Household Charge for 2012 will be capped at €130 if paid to the Local Government Management Agency before 30 April 2013.
b. From 1 May to 30 June 2013 normal Household Charge collection, late payment fee and interest procedures will apply. The cap of €130 will no longer be available.
c. From 1 July 2013, any outstanding Household Charge will be increased to €200 and added to the Local Property Tax due on the property. In effect, the arrears of the Household Charge will be converted into LPT and collected through the LPT system. The Revenue Commissioners will pursue this additional liability when the LPT system is fully operational. Interest and penalties under the LPT system will apply to the additional €200.
The annual NPPR charge will apply for 2013 and the NPPR will be abolished thereafter.
Similar provisions as for arrears of the Household Charge will be put in place for the collection of any arrears of NPPR.
The Revenue Commissioners will engage in a comprehensive public communications campaign throughout the first half of 2013 involving the publication of comprehensive guidelines
Market Value Taxable Banks

House Value :
From To Property Tax €

€0 €100,000 €90

100,001 150,000 €225

150,001 200,000 315

200,001 250,000 405

250,001 300,000 495

300,001 350,000 585

350,001 400,000 675

400,001 450,000 765

450,001 500,000 855

500,001 550,000 945

550,001 600,000 1035

600,001 650,000 1125

650,001 700,000 1215

700,001 750,000 1305

950,001 1,000,000 1755

On a house Valued at €1.5 Million – the Property Tax will be €1800 plus 0.25% of 500,000 (€1250) giving a total of €3050
House Valued at 2 Million – Property Tax = €4300