Local Property Tax (LPT)
Under the Finance (Local Property Tax) Act 2012 (pdf) an annual Local Property Tax (LPT) charged on all residential properties in the State will come into effect in 2013. A half year payment will be due in 2013, with a full year payment due in 2014. The LPT will be collected by the Revenue Commissioners.
If you own a residential property in the State you will be liable for payment of the tax. (This includes local authorities and social housing organisations.) See ‘Who is liable to pay the LPT’ below.
Residential property is any building or structure (or part of a building) which is used as, or is suitable for use as, a dwelling and includes grounds of up to one acre. The LPT does not apply to development sites or farmland. The tax payable will be based on the market value of relevant properties. The LPT is a self-assessment tax so you calculate the tax due based onyour own assessment of the market value of the property. Revenue will not be valuing properties for LPT purposes but will provide guidance on how to value your property – see ‘Valuing your property’ below.
The Local Property Tax (LPT) replaces the Household Charge which has been abolished from 1 January 2013. Household Charge arrears that are not paid by 1 July 2013 will be converted into LPT and collected by the Revenue Commissioners through the LPT system. The Non-Principal Private Residence (NPPR) charge on second homes will apply for 2013 and should be paid to the relevant local authority.
Summary of LPT procedureFrom 11 March 2013 Revenue will write to residential property owners – see ‘Who is liable to pay LPT’ below. This letter will include an LPT Return form for completion, an explanatory booklet and a Revenue Estimate of LPT liability. The Revenue Estimate of LPT liability is not a valuation of a property nor should it be regarded as an accurate calculation of LPT liability. The Revenue Estimate is simply the amount that Revenue will collect from property owners if they do not submit their LPT return.
The explanatory booklet will help you to assess the value of your property – see ‘Valuing your property’ below - work out how much you will have to pay, complete the LPT Return form and decide how pay your LPT – see ‘How to apply’ below. You can read the explanatory booklet on the Revenue website (pdf) and see a sample LPT Return form (pdf).
You must send your completed LPT Return form back to Revenue by 7 May 2013 if submitting a paper form or by 28 May 2013 if submitting your return online through revenue.ie. The first LPT payment is due in July 2013, the exact date depends on your method of payment - see ‘Rates’ below.
Finance (Local Property Tax) (Amendment) Act 2013Under the Finance (Local Property Tax) (Amendment) Act 2013 there are some changes including:
RulesWho is liable to pay LPT?All owners of residential property, including rental properties, are liable to pay the tax. The following groups are also liable for LPT:
If there is more than one owner they need to agree who will make the LPT return and pay the tax. If no one pays the tax Revenue can collect the Revenue Estimate of the LPT liability from any of the owners.
Rental properties:
Where the residential property is rented on a normal short-term (less than 20 year) lease, the landlord will be liable for LPT. Long-term leases (more than 20 years), life tenancies and situations where a person occupies a residential property on a rent-free basis over an extended period and without challenge to their right of occupation will be treated as if the occupant owns the property. In these circumstances, the occupant will be liable for LPT.
Liability dateYou are a liable person for the Local Property Tax if you own a residential property on the liability (or ownership) date. The liability date is 1 May 2013 for the year 2013 and, for following years, 1 November in the preceding year. So for 2014 the liability date is 1 November 2013.
Exempt propertiesIf a property is a residential property on the liability date in a year it is a relevant residential property and is chargeable to LPT. Certain properties are exempt from LPT. You can find out more in our document on Local Property Tax: exemptions and deferrals.
Note that even if you own an exempt property you must still make a return to claim an exemption.
Valuing your propertyThe tax will be based on the chargeable value of a residential property on the valuation date. The chargeable value is defined as the market value that the property could reasonably be expected to fetch in sale on the open market on the valuation date. The valuation date is 1 May 2013 for the 4-year period until 2016. This means that the valuation of your property for LPT purposes on 1 May 2013 will stay the same for 2013, 2014, 2015 and 2016 (even if you make improvements to your property).
Valuation will be by self-assessment in 2013 and these self-assessed valuations will be used until the end of 2016 (this means that the valuation in 2013 will apply for 3 ½ years).
An online guide providing indicative property values is available from 10 March 2013. This guide provides average indicative values for different property types in the area. You may also find the register of residential property sales, published by the Property Services Regulatory Authority (PSRA), propertypriceregister.ie, useful when considering the value of your property.
If you follow Revenue’s guidance, Revenue will accept your self-assessed property valuation. Revenue’s valuation guidance is intended to help property owners but each property owner must consider the specifics of their own property when working out their valuation. If Revenue has reason to believe that their valuation guidance has not been followed Revenue may query your valuation.
The Revenue Commissioners can legally enter a residential property for the purpose of ascertaining its chargeable value. You must permit a person authorised by the Revenue Commissioners to inspect the property if they consider this necessary.
If you do not submit a Local Property Tax return with your self-assessment of the LPT payable, the Revenue Estimate will become due and payable. The Revenue Estimate is automatically displaced when you submit a return with your self-assessed amount.
Rates
The Local Property Tax is based on market value bands. The first band will cover all properties worth up to €100,000. Bands then go up in multiples of €50,000. If a property is valued at €1 million or lower, the tax will be based on the mid-point of the relevant band at a rate of 0.18%. For properties valued over €1 million the tax will be charged at 0.18% on the first €1 million of value and 0.25% on any balance in excess of €1 million, with no banding applied.
Where to apply:
The Revenue CommissionersLocal Property Tax (LPT) Branch
P.O. Box 1
Limerick
Tel:(01) 1 702 3049 (for calls from outside ROI only)
Locall:1890 200 255
Homepage: http://www.revenue.ie/en/tax/lpt/index.html
If you own a residential property in the State you will be liable for payment of the tax. (This includes local authorities and social housing organisations.) See ‘Who is liable to pay the LPT’ below.
Residential property is any building or structure (or part of a building) which is used as, or is suitable for use as, a dwelling and includes grounds of up to one acre. The LPT does not apply to development sites or farmland. The tax payable will be based on the market value of relevant properties. The LPT is a self-assessment tax so you calculate the tax due based onyour own assessment of the market value of the property. Revenue will not be valuing properties for LPT purposes but will provide guidance on how to value your property – see ‘Valuing your property’ below.
The Local Property Tax (LPT) replaces the Household Charge which has been abolished from 1 January 2013. Household Charge arrears that are not paid by 1 July 2013 will be converted into LPT and collected by the Revenue Commissioners through the LPT system. The Non-Principal Private Residence (NPPR) charge on second homes will apply for 2013 and should be paid to the relevant local authority.
Summary of LPT procedureFrom 11 March 2013 Revenue will write to residential property owners – see ‘Who is liable to pay LPT’ below. This letter will include an LPT Return form for completion, an explanatory booklet and a Revenue Estimate of LPT liability. The Revenue Estimate of LPT liability is not a valuation of a property nor should it be regarded as an accurate calculation of LPT liability. The Revenue Estimate is simply the amount that Revenue will collect from property owners if they do not submit their LPT return.
The explanatory booklet will help you to assess the value of your property – see ‘Valuing your property’ below - work out how much you will have to pay, complete the LPT Return form and decide how pay your LPT – see ‘How to apply’ below. You can read the explanatory booklet on the Revenue website (pdf) and see a sample LPT Return form (pdf).
You must send your completed LPT Return form back to Revenue by 7 May 2013 if submitting a paper form or by 28 May 2013 if submitting your return online through revenue.ie. The first LPT payment is due in July 2013, the exact date depends on your method of payment - see ‘Rates’ below.
Finance (Local Property Tax) (Amendment) Act 2013Under the Finance (Local Property Tax) (Amendment) Act 2013 there are some changes including:
- Exemptions for properties used for recreational purposes by charities (connected with its charitable purpose)
- Exemptions for certain properties adapted for use by a permanently incapacitated person
- A reduction in the chargeable value of certain properties adapted for use by a person with a disability that were grant aided by a local authority
- Provisions relating to changes of ownership which oblige a seller to provide details of the chargeable value declared and the new owner to make a new return if the previous return did not give an accurate chargeable value
- All properties held by local authorities will be deemed to fall into the €0- €100,000 band
- Deferrals for people who have entered into insolvency arrangements under the Personal Insolvency Act 2012
- Deferrals in cases of significant financial hardship
RulesWho is liable to pay LPT?All owners of residential property, including rental properties, are liable to pay the tax. The following groups are also liable for LPT:
- People who have a long-term lease (20 years or more)
- People with a life interest or long-term right of residence (life or more than 20 years) in a residential property
- Local authorities or social housing organisations
- A person acting as a personal representative for a deceased owner (for example, as an executor/administrator of an estate). Trustees or beneficiaries are jointly liable where a residential property is held in trust.
If there is more than one owner they need to agree who will make the LPT return and pay the tax. If no one pays the tax Revenue can collect the Revenue Estimate of the LPT liability from any of the owners.
Rental properties:
Where the residential property is rented on a normal short-term (less than 20 year) lease, the landlord will be liable for LPT. Long-term leases (more than 20 years), life tenancies and situations where a person occupies a residential property on a rent-free basis over an extended period and without challenge to their right of occupation will be treated as if the occupant owns the property. In these circumstances, the occupant will be liable for LPT.
Liability dateYou are a liable person for the Local Property Tax if you own a residential property on the liability (or ownership) date. The liability date is 1 May 2013 for the year 2013 and, for following years, 1 November in the preceding year. So for 2014 the liability date is 1 November 2013.
Exempt propertiesIf a property is a residential property on the liability date in a year it is a relevant residential property and is chargeable to LPT. Certain properties are exempt from LPT. You can find out more in our document on Local Property Tax: exemptions and deferrals.
Note that even if you own an exempt property you must still make a return to claim an exemption.
Valuing your propertyThe tax will be based on the chargeable value of a residential property on the valuation date. The chargeable value is defined as the market value that the property could reasonably be expected to fetch in sale on the open market on the valuation date. The valuation date is 1 May 2013 for the 4-year period until 2016. This means that the valuation of your property for LPT purposes on 1 May 2013 will stay the same for 2013, 2014, 2015 and 2016 (even if you make improvements to your property).
Valuation will be by self-assessment in 2013 and these self-assessed valuations will be used until the end of 2016 (this means that the valuation in 2013 will apply for 3 ½ years).
An online guide providing indicative property values is available from 10 March 2013. This guide provides average indicative values for different property types in the area. You may also find the register of residential property sales, published by the Property Services Regulatory Authority (PSRA), propertypriceregister.ie, useful when considering the value of your property.
If you follow Revenue’s guidance, Revenue will accept your self-assessed property valuation. Revenue’s valuation guidance is intended to help property owners but each property owner must consider the specifics of their own property when working out their valuation. If Revenue has reason to believe that their valuation guidance has not been followed Revenue may query your valuation.
The Revenue Commissioners can legally enter a residential property for the purpose of ascertaining its chargeable value. You must permit a person authorised by the Revenue Commissioners to inspect the property if they consider this necessary.
If you do not submit a Local Property Tax return with your self-assessment of the LPT payable, the Revenue Estimate will become due and payable. The Revenue Estimate is automatically displaced when you submit a return with your self-assessed amount.
Rates
The Local Property Tax is based on market value bands. The first band will cover all properties worth up to €100,000. Bands then go up in multiples of €50,000. If a property is valued at €1 million or lower, the tax will be based on the mid-point of the relevant band at a rate of 0.18%. For properties valued over €1 million the tax will be charged at 0.18% on the first €1 million of value and 0.25% on any balance in excess of €1 million, with no banding applied.
Where to apply:
The Revenue CommissionersLocal Property Tax (LPT) Branch
P.O. Box 1
Limerick
Tel:(01) 1 702 3049 (for calls from outside ROI only)
Locall:1890 200 255
Homepage: http://www.revenue.ie/en/tax/lpt/index.html
