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LOCAL PROPERTY TAX

An annual Local Property Tax (“LPT”) will come into effect from 1 July 2013. The tax will be charged on the market value of all residential properties in the State. The tax will be a self-assessed tax i.e. taxpayers will be responsible for valuing their property, filing returns and paying the tax themselves. It is important to note that the LPT will be a tax on property and not on individuals. The tax residence of individuals is therefore not taken into account for LPT purposes. The operation of the LPT together with the main exemptions from LPT and a list of key dates are outlined below.

 

·         Revenue will issue LPT returns and guidance to property owners from March 2013 onwards. The guide will provide information on how to value property, calculate the liability, the payment options available and how to complete the return. The guide will be issued by post or, where an individual has registered for Revenue Online Services (ROS), the return will be issued to their ROS inbox.

·         Paper returns must be filed on or before 7 May 2013. Where an individual has more than one property or where an individual is a mandatory ROS filer he / she must file online.

·         Online returns must be filed on or before 28 May 2013.

·         The liability is calculated based on the market value of the property at the valuation date 1 May 2013. The value chosen on this date will be fixed for the years 2013 – 2016 inclusive.

·         Indicative values provided by Revenue are estimates of property values. Property owners are required to value their property themselves.

·         There are two rates of LPT at present. The first rate is 0.18% and this rate applies to the first €1 million of the property value. Any excess over €1 million will be charged at an additional rate of 0.25%.

·         The charge for 2013 is 50% of the annual charge i.e. 1 July 2013 – 31 December 2013.

·         A full years charge will apply in 2014. The payment date for the LPT in 2014 is 1 January 2014.

·         LPT can be paid in one single payment or it can be paid in equal instalments from 1 July 2013 until the end of the year.

·         Single payments can be made by Single Debit Authority, debit / credit card and by cash payments through approved payment service providers.

·         Phased payments can be made by deduction at source from salary / occupational pension, certain Department of Social Protection payments and certain Department of Agriculture payments, by direct debit and by equal cash instalments through approved payment service providers.

·         A system of deferral arrangements is available where there is an inability to pay and where certain conditions are met. Interest will be charged on deferred amounts at a rate of 4% per annum.

·         Any unpaid household charge that remains unpaid from 2012 will be converted to LPT at 1 July 2013 and this amount will be collected by Revenue. This amount may be subject to interest.

·         The Non Principal Private Residence (“NPPR”) charge will still apply for 2013. The NPPR liability date is 31 March 2013 and the liability must be paid on or before 30 June 2013.

·         There are a number of exemptions from the LPT such as new or unused properties purchased from a builder or developer between 1 January 2013 and 31 October 2016. These properties are exempt until the end of 2016. Also exempted are properties in specified unfinished housing estates, properties fully subject to commercial rates and properties purchased by first time buyers between 1 January 2013 and 31 December 2013 if used as the person’s sole or main residence. Additional exempted properties are listed in the Revenue guidance available at www.revenue.ie.If individuals do not file a return Revenue will pursue them for an estimated amount of tax using a range of options such as:

 

a.       Mandatory deduction from employment income, occupational pension or certain Government payments,

b.      Attachment of your bank account,

c.       Referral of debt to Sheriff or a solicitor for collection,

d.      The withholding and offset of any refund of other tax against LPT due,

e.      Non-qualification for Tax Clearance certificates,

f.        A late filing surcharge for self employed individuals and companies on Income and Corporation Tax returns, and

g.       Interest charges at 8% per annum and penalties.

·         The table below summarises the key dates to be aware of.

 

Date

Details

March 2013

Revenue will issue LPT Return form and information to residential property owners.

1 May 2013

Property Valuation and Property Ownership date.

7 May 2013

Due date for filing paper LPT returns.

28 May 2013

Due date for filing LPT returns electronically.

1 July 2013 onwards

Commencement of deduction at source from Salary / Occupational Pension or certain payments from the Department of Social Protection and Department of Agriculture, Food and the Marine.

Commencement of cash payments (including debit/credit card) through certain payment service providers.

15 July 2013 onwards

Commencement of direct debits.

21 July 2013

Single Debit Authority Payment deducted.

1 January 2014

Payment date for 2014 LPT – full year charge.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Further information on all aspects of the LPT together with sample forms and frequently asked questions is available from the Revenue website www.revenue.ie

 

Should you require assistance with the completion of your LPT returns please contact any member of the FMB tax team.

 

Disclaimer

By necessity, this briefing provides an overview of the legislation governing the operation of the Local Property Tax. It is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.





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