The default collection method for the Local Property Tax is going to be by deduction from wages (if you have a job). If you receive a Local Property Tax return and you fail to select a method of payment – or if you don’t send it back at all – then the default payment method is by deduction at source from wages. An attachment order or a court hearing will not be needed for the Revenue to deduct Property Tax from people’s salaries.
Of course many people will choose to have the Property Tax deducted from their salary – it is free to do and it is spread over the year.
Revenue will notify the employer to deduct the LPT from the employee’s net salary. The instruction to deduct LPT will be given via the employer Tax Credit Certificate (P2C) – both the ROS and the paper versions. LPT will not be shown on employees’ Tax Credit Certificates. (We assume that LPT deductions will be shown on payslips – otherwise how will people know it is being deducted?)
The employer should start deductions of LPT from July 2013 and spread these deductions evenly over the pay periods between July and December 2013.
Unless otherwise informed – the same arrangement will continue for 2014 and 2015 and 2016.
The same rules apply to deductions from occupational pensions paid by employers.
Since early 2011 the Revenue have had the power to use attachment orders to recover taxes owed from people’s salaries. There is guidance in place about the use of these attachment orders when deducting from wages. Revenue normally use them when the tax debts are over €10,000 and the person is earning more than €50,000 a year. There are no such restrictions or guidance in place as far as we know for deduction of the Property Tax from wages.
Employers will have to keep records for 6 years of all Property Tax deductions
If employers don’t act on Revenue instructions to deduct Property Tax from salaries – they could face penalties of €3000.
Read More about the Property Tax in Ireland