There have probably been a lot of people worrying about the news that the new Local Property Tax can be deducted from Social Welfare payments and state pensions .
When you fill in the Local Property Tax return – you will have the option to choose to have payments deducted at source from certain payments made by the Dept of Social Protection (formerly known as Social Welfare) Deductions can be requested to be taken from the following types of payments :
A State Pension (Contributory)
B State Pension (Non-Contributory)
C Widow/er’s Contributory Pension
D Widow/er’s Non-Contributory Pension
E State Pension (Transition)
F One Parent Family Payment
G Invalidity Pension
H Carer’s Allowance
I Disability Allowance
J Blind Pension
If you don’t complete and return the Property Tax Return – Revenue have the power to deduct payments from Dept of Social Protection payments “at source” even if you don’t ask for it.
The Revenue can get the Property Tax deducted from any regular social welfare or state pension payments (not just the ones listed above).
BUT- any deductions will not be allowed to bring the weekly payment below the level of Supplementary Welfare Allowance ( €186 for a single person over 25 and €310.80 for a couple) . So – anyone just on the basic Supplementary Welfare amounts will not get property tax deductions taken from welfare.
It is possible though that others on higher levels of welfare payments could get deductions taken off to pay the property tax. The most common weekly amount of the property tax is expected to be €315 a year which works out at just over €6 a week .
There are to going to be no property tax waivers or exemptions for people on low incomes . No rebates , waivers , reductions or discounts. Delaying or deferring the payment is the only mitigation available.
When you complete the Property Tax return you can choose to defer the payment – (This just means to delay it ) but only if your income is below a certain amount and the property is your sole residence.
Deferral of 100% of the tax is an option for single people with a gross income below €15000 a year (€288 a week) . For couples the income limit is €25000 a year (€480 a week).
So the majority of people on social welfare and basic pensions will probably be able to defer the payment if they choose to.
You can also choose to defer up to 50% of the LPT if you are single and your gross income is below €25,000 single (480 a week) or €35,000 for a couple . (€673 a week)
For Owner-occupiers who have 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 .
Deferral will incur a 4% annual interest rate. (After 5 years – an LPT charge for 1 year of €405 will have interest of €99 added) All deferred amounts an interest must be paid on the sale of the house or on transfer (i.e after death)~