Local Property Tax – The Details

The details of the new Local Property Tax have been announced in the 2013 Budget

Our original assumption that it will be a self assessed tax based on the market value of the property was correct . More about Self Asessment of Property Tax Here

The tax  rate is based on 0.18% for the first 1 million of value and 0.25% on the portion of the value over 1 Million. The minimum tax is €90 a year on houses less than €100,000

Properties valued over €1m will be assessed at the actual value (no banding will apply) at €1800 plus  0.25% of the portion of the value above €1m

Property Tax Calculator

See Here – How Much Property Tax Will You Have to Pay ?

The Property Tax is due to take effect from July 2013 – so  only 6 months tax will be charged in 2013.   The Household charge will be abolished from Jan 2013 and the NPPR is stopping in 2014.

Property Tax exemptions will  be the same as those for the Household Charge .  (Tenants will not be liable). More about Property Tax Exemptions Here

Homeowners with low income can apply for  a deferral. This means the tax will still be charged – but payment can be delayed – even until after death.

A voluntary deferral will be available to those whose gross income limits do not exceed €15,000 for a single person and €25,000 for a couple.

A deferral option will also be available up to the end of 2017 where gross income less 80 per cent of mortgage interest falls below €15,000 for single people and €25,000 for a couple.

The local property tax will eventually have to be paid when the house is sold or on death of the owner. A 4%  annual interest rate on the tax will be charged on any deferred amounts .

The Revenue Commissioners will collect the property tax and will also take over the collection of  Household Charge arrears.

They will struggle to track down owners if they are relying on the Household Charge database – but it is all they have.

Revenue is expected to start collection of the Property Tax from July 2013  and will offer  the options of paying it in annually , in instalments or having it deducted from wages.

See our list of Answers About Property Tax for more useful information.

Not long after the introduction of this Property Tax – homeowners will then be asked to  pay Water Charges (from early 2014)  . This could add as much as another €500 to owners and tenants annual outgoings .  More about Water Charges.

It is not yet clear if there will be a dedicated Property Tax web site such as PropertyTax.ie

(The PropertyTax.ie domain is owned by Halifax Insurance Ireland Limited – but they  are not using it. I wonder how much they will want to sell it for ? )

31 thoughts on “Local Property Tax – The Details

  1. Property Tax: With regard to my property tax payment please tell me what do you think?

    I am a widow age 78 and wonder can I apply for disability exemption to that tax or at lease a reduction ?
    My income is 30.000.00 euro per year.
    My problem is a fractured back since 2002 with severe arthritis.
    I can get around with the help of a stick, a stairlift and a disability drivers licence.

    I would appreciate hearing what you have to say?

    Regards and thank you,

    Marie Henry.

  2. My mother passed away June 2012. A family member lived at the house until November wherupon he emigrated. We will collectively inherit the house but we have put a tenent in there for the time being. Who is responsible for paying the house tax? We have not registered with anyone nor have we received a bill for last year’s fixed tax. My mother was a pensioner – could this be the reason?

    Many thanks

    • Pam your mother would have been liable for the Household Charge for 2012 . That charge will probably have to be paid before the house is inherited or sold. No bill would have been sent to your mother – it was self registration and thousands didn’t pay it (yet).
      The liability date for the new property tax in 2013 is MAy 1st – so whoever owns the house then will be liable.
      In the case of joint owners – any one of them can register and pay andsort out the split between themselves.

  3. I share a house with my parents, they own two thirds and I own one third. They are pensioners on a state pension.. Who pays the property tax in this case ? Am I liable for the whole lot?

    • Maz Revenue say that if you are not the sole owner of the property, you should agree with the other owner(s) who is to complete and submit the Return and pay the tax due. If no one pays, Revenue can collect the tax due from any of the joint owners.
      You will just need to sort out any splitting of the bill between you .

  4. What exactly does Voluntary Deferral mean? I am an OAP whose pension is less than 15,000.
    Thank you

    • Voluntary deferral means you have the choice to pay it now or delay paying it . The idea is that it will be paid when the property is sold or inherited.

  5. I have an unfinished house in a rural area, it is under construction,it is not suitable for occupation. Am i still liable for this property tax?

    • Karina The valuation date is MAy 1st 2013 – so if the property is not suitable for occupation on that day – the owner will not be liable. As far as we understand – it will not be liable until the next valuation date in 2017. It might be worth keeping some evidence of unsuitability for occupation – ie date stamped photos , builders invoices , planners documens etc – just in case Revenue ask any questions.

  6. I have just read in the Irish Independent about the property tax due to kick in later this year. My mother had a house in Ireland, which I have sadly inherited recently. The house is empty (and has been for a few years) and I live in London. What am I in for this year and what do I have to do??

    • Marian if the house is suitable for occupation and you are the owner on 31st March 2013 – you will be liable for the €200 NPPR – see more about that here. The good news is that the NPPR only applies for 2013
      From July 2013 onwards you will also be liable for the new Local Property Tax . The Revenue Comissioners are supposed to be writing to all owners in March this year to let them know about it. If they have you on their records as the owner you shpuld get a letter and a tax return to complete.

  7. Is there a difference between the 100.00 Property Tax which was introduced in 2012 and the current property tax, or are they the same? I have seen that the one which we registered for and paid is now being called a ‘Site Tax’. We registered and paid our 100.00 (Property tax?site tax), but under the new rules, because we purchased between 2004-2008 we should not pay property tax until 2016. Does this mean that we eligible for a refund of 100.00, or is it just going to be given a new title so the government can keep it?

    • Kay the €100 you paid in 2012 was the Household Charge. That is being replaced bt the new Local Property Tax in 2013 – and the details areall contained in the article above. There is no exemption for anyone who bought between 2004 -08 – I don’t know where you heard that?

  8. Hi, Is the property tax taken on the value of the stand alone house or is the site taken into account also? Im unsure how to value a small self built house (with no mortgage) on a few acres of land? Is the value of the land taken into account also as it seems impossible to seperate the two?

    • It’s not clear if the land is included – I suppose if you sold the house you could sell some of the land separately – but as it stands it is all residential property. I would wait for the Revenue to send out the Property Tax Return in March – and see what “guide” value they place on it. If it is lower than you expected – then stick with that.

      • The legislation state sthat a maximum of 1 acre o fland is included for valuation purposes

  9. I think that tenants should be responsible for the LPT as the occupiers and the Landlord would continue to pay the NPPR charge. At the moment it seems if you rent, dont have kids or anyone to care for, dont drink or smoke then thats the best place to be in this country with the exception of the motor tax of course

    • Karen – the main idea of a property tax is to tax the “wealth” that is held in property.
      It is hardly fair to tax someone who doesn’t own any property with a property tax.
      It is just an IMF recommended way of getting guaranteed steady tax income – and the government have to do it (as would Fianna Fail if they were in) . They have to say it’s for local services – but in reality it’s just another tax lumped into the overall pot.

      • I think it is IMF suggested rather than recommended. The IMF couldn’t care less how we raise the money to pay back their loans. In practise we are borrowing the money from the ECB to repay the IMF…..

        The LPT is a tax because they couldn’t be bothered (or afford) to actually value property and the revenue have draconian powers to get money.

      • The IMF recommend the use of property taxes all over the world as a more reliable way of getting revenue.

        eg “Property taxes — are another revenue source that can be both efficient and equitable. Yet property taxes are under exploited in most countries. Low income countries have room to increase revenues from this source as their income rises. The IMF‘s technical assistance is helping developing countries introduce or improve property taxes.”

        from http://www.imf.org/external/pubs/ft/survey/so/2011/POL121611A.htm

  10. The tax seems unbalanced. It’s not .18% of the value of your house. It’s .18% of the mid-point of the band. So people could end up paying significantly more or less than .18% of the value of their house. This seems unfair. Someone with a modest house could be paying more, in percentage/value terms, than someone with a far more expensive house.

    • It just makes it simpler to have bands wuth set amounts rather than thousands of individual amounts all over the place. It probably halps them work out how much they expect to get in too.

  11. We bought a holiday home (€200000) this year in Clare … are we then liable for both property tax and secondary residency tax of €200 per year?

    • Jackie – you will be liable for 6 months of the new Local Property Tax in 2013 and the 200 NPPR also. From 2014 it will just be the Local Property Tax.

  12. Hi,
    I am a bit confused. The Property Tax Calculator states €90 for a house that is valued almost €100,000, yet 0.18% of that figure is €180. In addition, what happens if the property value is for example €110,000; does this mean the person has to pay the same rate of €225 (based on your calculator) as the owner of house valued at €149,000?

    Dave H

    • The tax is based on the mid value of a a band – to keep it simple.
      The first band is zero to 100k – and the nmid point is 50k – which gives the rate of 90.
      All other bands are 50k . So yes – a 100k house will pay the same as a 149k house.

    • thats it Dave, its designed in a way to catch all the ordinary joe soaps like you and me…why we bother is another days work….

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