Amidst the ongoing debate in relation to the newly introduced property tax, there has been much emotion, exaggeration and misinformation doing the rounds. This atmosphere has lead to much confusion over what should be a relatively simple matter for most home owners. Firstly, for most people, i.e., those with homes up to a value of €300,000, the tax will be a relatively small amount of between €90 and €495 per year. The amount payable in 2013 will be half the annual amount as the tax only officially comes into effect on 1st July 2013.
So how will the tax be determined?
The tax will be collected by the Revenue Commissioners, i.e., the taxman to you and me. He will write to each and every householder (there are approximately 1.6 million in the country) and propose a value for your property. There has been much debate over this as the government does not have a complete register of all residential properties in the country, let alone a register of the values of them. Nonetheless, the government insists that this is possible. Let’s assume that this is possible. The tax will be calculated at 0.18% of the mid point of the band in which the value of your property lies. The bands start at 0-€100,000 and then rise in €50,000’s to €1,000,000, after which the tax rate increases to 0.25%. The relevant tax amount and the bands are laid out in the following table.
Value band € Tax rate Annual Payable
Tax € in 2013 €
Value band € Tax rate Tax €
0-100,000 0.18% €90
100001-150,000 0.18% €225
150,001-200,000 0.18% €315
200,001-250,000 0.18% €405
250,001-300,000 0.18% €495
We are all painfully aware that property values have dropped in the past number of years, so how do we know that the Revenue has valued our property correctly?
Well, if you have any doubts you should contact a qualified valuer for help. As you can see from the above the exact value is not critical to the amount of tax you will have to pay except where the difference moves the value into a different value band. However, it should be noted that the value may be used by the Revenue at a later date to compute Capital Gains Tax, Capital Acquisitions Tax and for this reason the value should be as close to a real value as possible. If you are unsure the best advice is to contact a professional valuer, but in many cases this will not be necessary. But given that there are 1.6 million values to be issued by the Revenue, I cannot help fearing that there will be many mistakes that will result in too high a tax being paid. Of course there will be cases where the value is too low. Will this come back to bite you in the future? Nobody knows at this time.
So what next?
Revenue will write to you in March with an estimated amount of local property tax, an information booklet on the tax and a tax form for completion. It is important that you complete this form and not leave it to gather dust. The completed form must complete with a self-assessment of the value must be sent back to Revenue by May 7th or later, May 28th if submitted electronically. If you do not accept the Revenue value you may change it on the self-assessment. Please note that if you refuse to pay or do not send back the form the tax will be deducted at source, by sheriff or court action or attachment orders based on Revenue’s estimate of value.
In summary, please complete and return the form. For most people the amount will be small and it will also be possible to pay the tax in instalments. The value will be easy for most homeowners to confirm using the new website www.propertypriceregister.ie. If in doubt, contact a professional valuer for advice.
Contact Kehoe Auctioneers today if you have any questions 0599131678