Self Assessment of Property Tax Valuations

Updated April 14th : Almost every home owner in Ireland should have received their Local Property Tax Return by now – but there are probably still some to be sent.
Many homeowners are worried about,  or don’t fully understand the process for calculating  how much property tax they should  pay.

The new Local Property Tax is  based on the market value of each dwelling on May 1st 2013 . See the Valuation Bands and Amounts here.

Who is going to decide on the property value ?

Property Owners are responsible for declaring  which valuation band their home falls into as at May 1st 2013.

The Revenue Commissioners  Property Tax Form (LPT1)  is accompanied by a letter giving an Estimate of the property tax due for 2013 . This revenue  estimate is based on average values in the area – it is not based on an individual valuation. It could be lower or higher than the amount you need to pay.
If you don’t return the form – the estimate is the amount you will be liable to pay – but you need to return the form and enter the valuation band that you think your house belongs to.  The estimate is not a bill or a demand.

Revenue  have provided an online mapping tool for to help owners  value a property   – but they will not provide a valuation for each house in the country. (That would be impossible to do with any accuracy).

See more here about the Revenue Valuation Map Website

You can also look at this article that shows Irish house price increases going back to 1980 - which might be useful in trying to estimate the current value of your house

Revenue don’t have  any clue how big  your house is or  how many bedrooms it has . They won’t know if it is detached , terraced or semi detached or how big the garden is or if you have gold plated taps. All they can try to estimate is the average price of houses in your area  – so that will be the basis of any estimate of the property tax due. The estimate could be way off the real value.

Finance Minister Michael Noonan has said in the Dail that this Revenue Estimate of LPT “is not a valuation of the property nor should it be regarded as an accurate calculation of the amount of LPT that they should  pay”.

The estimate is being provided so that if  a property owner fails to submit their LPT return  Revenue will have an amount of tax that they can then  enforce collection of .
Property owners are still obliged to provide a valuation of  their property – and when they do , the Revenue Estimate of LPT will no longer be relevant.

Minister Noonan also said that the “Revenue valuation guidance is intended to assist property owners, but each owner will need to consider the specifics of his or her property, the area and any other local factors that influence the value when making his or her valuation assessment.”

The valuation date is  set at May 1st 2013 .  The value is to include garages , out houses and gardens / land of upto 1 acre. (Any land over 1 acre that goes with the property  is not to be used for valuation.)  The valuation at May 2013  will hold for three years until there is a revaluation in November 2016 – regardless of any improvements to the house or any problems that arise.

What Happens if I Undervalue my House ?

Some homes can have a reduced valuation  for property tax purposes where it as been adapted for occupation by a disabled person . This will only apply where the adaptation was grant-aided by a local authority.

The reduction in valuation is limited to the maximum grant payable (currently €30,000) – but if the adaptation cost less than €30,000 – then this will be the reduction in valuation allowed.  See more details about disability here

The completed LPT Return form will have to be sent back to Revenue by 7th May  2013. There is also an option to file an  LPT Return form online at revenue.ie  – which has to be done by  28 May 2013 .

If  a Local Property Tax Return is sent to a person who is not the liable owner of the property, he or she need to inform Revenue that they are not liable and let Revenue know who is liable .

More About The Property Tax Here

So – it looks like there’s no avoiding the Local Property Tax. Even if  your house is missed off the Property Tax  Database it will be spotted when it is sold or inherited.  Revenue have said that if a property owner doesn’t get a Property Tax return they need to contact Revenue  .
There are probably going to be thousands of tax returns issued to people who don’t own the property  – but if they ignore it the Revenue will start charging them anyway – and the default option is deduction from salary or pensions/benefits.

A recent IMF report mentioned that self assessment for property tax was not very common – they only mentioned one place where it had been used with success – and that was Bogota in Columbia !

A 2002 internal report by staff at  the World Bank about Property Taxes – mentioned that  “self-assessment is an appealing procedure to poor countries with little administrative capacity. It does not require assessment staff, and it appears to be easy to implement.

A recent  World Bank report  about property taxes  said that  ……
Self-assessment
can lead to inaccurate estimates of property values with a tendency toward underestimation. It violates the principle of fairness on the basis of ability to pay because people with comparable properties will not necessarily pay comparable taxes. Generally lower-valued properties have a lower rate of underestimation than do  higher valued properties, making this assessment approach regressive (taxes are relatively higher on low-valued properties). Under-estimation also obviously erodes the size of the tax base .

It is hard to see how many rural dwellers , especially the elderly – are going to be able to guess the value of their home.  They might have lived in the same house for 30 or 40 years – with the only houses sold near them in recent years being newly built ones.  The property price register will be no help – because it only lists location and price – no mention of bedrooms or size etc.  As Oliver Hardy used to say – ” another fine mess “

17 Comments

  1. Michael jones says:

    I have received no letter about the value of my property . the revenue website which is supposed to show a map of values based on location is useless.I object to a tax which helps dropouts from outside countries claim monies when there is no means check upon arrival .i object to rogue property developers and incompetent banks getting my hard earned tax paid cash , Michael.

  2. Mary says:

    There has always been a property tax in England. (Previously rates, now council tax which is used to help provide local services such as refuse collection, parks, fire service and police.

    My parents went back to Ireland in the late 1990’s having emigrated to England in the 1950’s. What I would like to know is when my father is no longer alive will his four daughters in England have to pay this tax. None of us are wealthy people, and none of us have any money left over each month after paying bills. The house my father lives in was built in 1997 on family owned land in rural Ireland and is now worth absolutely nothing. Who would want to buy a house in the middle of nowhere with the nearest shop ten miles away and no public transport of any sort.

    • Money Guide says:

      Mary – any property that is occupied or suitable for occupation is liable for the Property Tax. It doesn’t matter if the owner lives overseas.

    • Brendan says:

      Mary, if, as you say, the property has such little value, then the property tax will be less than €100 per year, and you’ll have nothing to worry about.

      I would advise you to sell the property when your father passes on, but to go through the hassle of selling a house just to avoid a measly €100 a year tax is insanity. It would be so much less hassle jut to pay the tax.

  3. Oisin says:

    If they are asking me to “self assess”, are they asking me to complete some work for them? If they are asking, are they entering into a contract with me that I can charge them for my time. I never agreed to do this work for free and my time is expensive. Currently, I charge €400 per hour to do internet research so I figure that this will take me about 4 hours to come to a resonable estimate. Once they agree and pay me my €1600, then they can have my assessment and I’ll pay their property tax.

  4. nic says:

    dont pay it………. your getting nothing for it…. this money goes to repay the banks that ripped us off…. nothing is being done about peoples arrears, there are hardly any jobs here and people are living on a small wage with huge bills….