Some people might have got the impression from headlines in the press and on the radio that all homes that have been adapted for people with a disability will be exempt from the property tax . This is not the case – the full exemption will probably only apply to a small percentage of disabled people.
Update: May 2014 – Some restrictions on exemptions for disabled people to be lifted – see more here
The changes to the Property Tax regulations state that the following type of property will be exempt .
A residential property that is purchased or adapted for use as a sole or main residence by an incapacitated individual
a) where an award has been made by the Personal Injuries Assessment Board or a court
or b) where a trust has been established specifically for the benefit of permanently and totally incapacitated individuals.
In the case of adaptations to a property, the exemption will only apply where the cost of the adaptations exceeds 25% of the market value of the property before completion of the adaptations. So a house that was worth €200k would need to have adaptations of at least €50k to qualify for the exemption. Anything less than that and the full property tax will be charged.
Reduced Property Tax for disability adaptations.
In some cases – owners will be allowed to reduce the valuation of their home for property tax purposes where a home has 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.
This valuation reduction of up to €30,000 could result in a property tax reduction of as much as €135 a year if it means the property falls into band 01 instead of band 02 . It some cases the reduction it might not reduce the property tax at all – for example a house valued at €230,000 with a €20,00o adaptation would be revalued for property tax at €210,000 but will still remain in the same band 04 for property tax purposes and will still be charged €405 a year.