The local property tax system is evolving


PLUS TT THIS YEAR the government announced that the Irish local property tax (LPT) system will change from November.

About 1.4 million letters are being sent to landowners across the country explaining the changes, which will apply each year from 2022 to 2025.

The tax applies to all residential properties in the country, including vacant properties, properties that were not subject to the LPT since 2013, and properties not yet registered for the LPT.

More than half of homeowners won’t have any change to their LPT fees, but just over a third of people can expect an increase.

Here’s an overview of what you need to know about the new system and how to make sure you’re paying the right amount.

How do I know if my LPT bill will change?

Despite the changes to the system, the LPT tariff will not necessarily be different if you are already paying it. However, you should still check it out anyway.

The new system was designed to take into account the sharp rise in house prices in recent years, but the number of LPT tapes remains at 20, just like the old system.

What is different is that the boundaries of these bands have grown and widened.

For example, the valuation of houses in tranche 10 was previously between € 500,001 and € 550,000 but is now between € 875,001 and € 962,500.

This is what the groups now look like:

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As the last line indicates, the effective rate of the LPT will be 0.1029% (excluding those in bands 1 and 2) – down from the current rate of 0.18%.

For the majority of homeowners, the value on which their LPT is calculated will increase, but the percentage they pay will decrease.

One of the most significant changes to the system concerns homes built or purchased since 2013.

In the old system, those who bought a house for the first time or properties built since 2013 were not responsible. This is no longer the case, which means that 140,000 additional owners will be included for the next three years.

How do I value my property?

As a self-assessed tax, Revenue requires owners to self-assess their properties. To do this, you look at what value (s) your property (or your property) will be valued on November 1 of this year.

As noted above, the LPT structure is based on 20 appraisal brackets, so homeowners don’t have to appraise their home at a specific amount (unless your property costs more than $ 1.75 million). , in which case you do).

To help determine which category a property falls into, Revenue has created a rating tool on its website, which allows users to submit their Eircode to find their property and select it on a map. Users will then be assigned a price range for their address.

This tool is intended as a guide only. Revenue told homeowners that they should take into account the specifics of the property and assess whether its value falls within the strip in their area – for some, the value may actually be less than what the tool says.

Revenue has also published guidelines to help those looking for other sources of information they can use to assess the value of their property.

It’s also important to note that some land and buildings should be included in your assessment, not just the main residential building itself. This includes gardens, walkways, garages, and outdoor structures like grandma’s apartments or home offices.

However, only land up to an acre should be included: this means that farmers do not need to include adjacent farmland or animal shelters.

Can I benefit from an exemption?

Certain residential properties will not fall under the LPT regime.

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These include homes that are certified as having a significant level of pyrite or mica damage, residential properties owned by charities or public bodies for accommodation purposes, and properties built or adapted for people with disabilities.

A full list of properties eligible for the exemptions is available here (but note that references to properties built or purchased since 2013 will not apply).

Revenue said those who are eligible to apply for an exemption are still required to provide a self-assessed appraisal of their property, but must select the appropriate exemption category on their LPT return.

How do I tell Revenue the value of my property?

After you have assessed your property and verified if you qualify for an exemption, the next step is to submit your LPT income tax return. You must do this by November 7, 2021.

You can submit your return online at (using myAccount, ROS, or the LPT online service), or by mail.

Even if you miss the deadline, you still need to submit an assessment and Revenue will pursue the estimated liability amount.

How to pay the LPT?

You can pay the fee online through the Revenue website, or by using a paper form if you prefer to do it in person (although your options are more limited for the latter). More details are available here.

You can pay your bill in a single payment or in several installments during the year.

Payments will start from January 2022 and the deadline for full payment is January 12.

Contains a report by Rónán Duffy.

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