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. 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.

  2. 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.