Deferral of The Property Tax

There are   no  Local Property Tax (LPT) reductions , waivers  or  exemptions for people on social welfare or low incomes .

See How Much Property Tax You Will Have to Pay

You can see the Exemptions From The Property Tax Here

The only option available for home owners  on low incomes who can’t afford to pay the Property Tax is to request  a deferral. The payment of the LPT can be delayed or deferred if the house is your sole residence and  your income is below a certain level.

Note :– Deferral will incur a 4% annual interest rate.  (eg. After 5 years – an LPT charge  of €405 a year unpaid each year – will have total interest of  €242.20 added.  After 20 years a recurring €405 a year Property Tax bill will accumulate to €11502- made up of €8100 tax and €3402 interest )

Conditions to Qualify for Deferral of Property Tax
(You must satisfy ONE of these conditions)

Full Deferral  : Condition Number 1
Your Gross income for the year is unlikely to exceed €15,000 (single) and €25,000 (couple).

Full Deferral Condition Type 2 For owner-occupiers who have an outstanding mortgage, an adjusted gross income limit applies. The thresholds  (€15,000 single, €25,000 couple) may be increased by 80% of the gross mortgage interest payments that a liable person expects to make by the end of the year for which gross income is being estimated. This type of deferral will be available until 31 December 2017.

Partial Deferral 50% Condition Number 3
Your Gross income for the year is unlikely to exceed €25,000 (single) and €35,000 (couple).

Partial Deferral  50% Condition Number 4
For owner-occupiers who have an outstanding mortgage, an adjusted gross income limit applies. The thresholds of  (€25,000 single, €35,000 couple) may be increased by 80% of the gross mortgage interest payments that a liable person expects to make by the end of the year for which gross income is being estimated. This type of deferral will be available until 31 December 2017.

Summary of  Conditions For Income related Deferral

Liable
person (owner-occupiers only)
To qualify
for a full deferral gross income must not exceed
To qualify
for a partial (50%) deferral gross income must not exceed
Single, no
mortgage
€15,000 €25,000
Couple, no
mortgage
€25,000 €35,000
Single, with
mortgage
€15,000 +
80% of gross mortgage interest
€25,000 +
80% of gross mortgage interest
Couple, with
mortgage
€25,000 +
80% of gross mortgage interest
€35,000 +
80% of gross mortgage interest


Gross income is defined for deferral purposes as  income before any deductions, allowances or reliefs that may be taken off for income tax purposes. It includes income that is exempt from income tax and income from the Department of Social Protection but excludes Child Benefit. .

For Owner-occupiers who are paying a  mortgage, you can deduct  80% of mortgage interest from your gross income when working out your eligibility for deferral  – but this option is only available up to the end of 2017 .

For example :  For someone with a €200,000 mortgage  at a rate of 3.5% – the annual interest will be about €7000. Eighty percent of this would be €5600.  So – a single person with this mortgage and a  gross income of  €30000 could ask for a 50% deferral based on their “adjusted” income being €24400. In this example the deferral would only last until 2017 – so they would be hit with a bigger bill in 2017.

All deferred property taxes and interest will have to be paid on the sale/transfer of the property.

(There is no deferral option on second homes or for landlords. )

There are three other categories that may qualify for a deferral of LPT:
These were added in February and are not mentioned in the LPT1 leaflet.  If you want to apply for deferral of LPT under any of these 3 categories you will need to fill in an extra form  – the LPT2 Form

Personal representatives of a deceased liable person where a property has not been transferred or sold within 3 years of a liable person’s death may apply for a deferral until the earlier of (a) the date the property is transferred or sold or (b) 3 years after the date of death.

A person who has entered into an insolvency arrangement under the Personal Insolvency Act 2012 may apply for deferral of the LPT that is due during the period for which the insolvency arrangement is in effect.

A person who has suffered both an unexpected and unavoidable significant financial loss or expense, as a result of which he or she is unable to pay the LPT without causing excessive financial hardship, may apply for full or partial deferral.

 

17 Comments

  1. Breda says:

    My Uncle lives in the US and has an inherited home in a local town. As he doesn’t live here, but still wants to pay the tax, I cannot do so as he has no PPS number! He has lived in the states for 60 years.
    Would appreciate any advice you could give me.

    Breda

    • Money Guide says:

      Property owners living abroad can pay and file online without a PPS number.

  2. Adrienne says:

    Hi

    My mam is 77 and widowed and her only income is the state pension. She is confused as to whether or not to opt for deferral. Have you any advice please?

    Thanks

    • Money Guide says:

      Adrienne – deferring the tax will pass any LPT debt onto your mother’s estate when she dies – so she won’t have to worry about it – but whoever inherits the house will.

  3. mike says:

    my mum is 66 and brother is 43 both sharing a council house and both on dole or pension. do they have to pay?

    • Money Guide says:

      Mike – if they are tenants they will not be liable . If they get a tax form they should send it back to Revenue and tell them that the Council are the owners.

  4. Doris says:

    I live in a house in Kerry with my own well which I have to maintain, septic tank which I am already paying charges for but have to maintain myself, on a private road which I have to maintain myself, with no bin collection and no public lighting. There are absolutely no services available to me. So what am I paying the tax for?

    • Money Guide says:

      Doris – I supose the government would say you are contributing to the funding of the county council and all the services they provide to residents in Kerry. You may not have children – but your income tax goes/went towards schools. There are service that Kerry Council provide to keep the county running. You go to shops on roads that are maintained by the council etc etc

  5. lynda says:

    If i pay Managment charges of €1200 a year do we still have to pay the property tax also last yeay i was out of my home April till may because of Pryite been fixed am i still liable for the €100.00of last year

    • Money Expert says:

      Management fees charged by a private company have no affect on property tax liability.
      Also – there was no exemption for the Household charge for Pyrite damage – and if it has now been fixed it will not have any effect on the Property Tax liability. It might make your house worth less – and therefore you would pay less property tax.

  6. shile foley says:

    pls explain to me the above calculation on the deferral of a property charge of 405 for twenty years. If it,s 81 for 5 years how does it work out at 3402 after 20 years. Is the interest compounded?

    • Money Expert says:

      Shile the figure of 81 was just the interest for 5 years on one years charge (not 5 years charge). It was probably confusing. I will change it. The 20 year figure is an accummulated interest on 20 years of deferred payment.

  7. Susan says:

    I live in a local authority house in a private estate. I signed a tenancy aggrement in 2005. I will be left here as long as I want. I’m on a widows pension. Am I liable for the property tax.?

  8. Lile says:

    I built a new house in 2008 and subsequently had to pay the county council a planning levy of Eur16,000. I live in a country area and don’t even have a foot path or street lighting. When I queried what the levy was for I was advised ‘ services’. Having paid this lump sum, I don’t think it’s fair that people who have paid this amount of money to the council should be hit with a subsequent property tax. This amount of money which we paid to the council would have completed our home.

    • shile foley says:

      I know it,s so unfair. And is it only people who are trying to buy their own houses who avail of services.? Should this tax not be paid by everyone whether they are buying or renting and given a different name like e.g council tax.?

  9. ronan says:

    I have a house leased to my local athourity, when i signed the lease contract 3 years ago. i was told the reason i was getting a smaller weekly rent from them was because my leased house was exempt from all nppr and h.h charges. Where do i stand now?

    • Money Expert says:

      If the lease is long term (20 yrs or more) – then the council will be liable for the property tax.