What Happens if I Undervalue My House for Property Tax

There seems to be some  confusion about house price valuations for the Property Tax . This has not been  helped by some newspaper articles and radio programmes trying to create a bit of controversy.

The Property Tax – if it was done properly like most other countries – should have involved individual valuations by the Revenue who would then tell us what we had to pay . Instead – because it has to be implemented quickly and cheaply  – we are being told  to self assess the value of our properties.

Revenue have tried to help people work out the value of their house by providing guidance and online tools to give everyone an idea of average values in their local area.  You don’t have to give an  exact figure for the value of your house – just work out  which tax band it belongs to  . Ie.  less than €100,000 or between €100,00 and €150,00 or between €150,000 and €200,000 – and so on in bands of €50000. See The Property Tax Bands and Rates Here

Revenue are showing an estimated amount for Property Tax on the LPT1 Form.  Some owners are treating this  as the amount they are obliged to pay.  It is not a bill.  The Revenue estimate is only there so that they have an amount to try and recover off people who don’t reply. It is based on average sale prices for all types of property in your area  – it is not an individual valuation. They don’t know how big your house is or if it is a one bedroomed apartment or a 3 bedroomed duplex.  If you think your property  should be in a lower band  than teh Revenue estimate – then fill that in on the form and  pay a lower amount of Property Tax. You do not have to pay the Revenue estimated tax. You do not have to appeal against the Revenue estimate if you don’t agree with it  .

Similarly – if you think your property tax should be  more  than the Revenue estimate – you should pay more.    . Revenue don’t know about the loft extensions or the basement games rooms   – but if you have such “features” you should value the house accordingly.

What Happens if Revenue Think You have Undervalued ?

How Will They Know ?

Sometime in the future – maybe in 2014 or 2015 – when they have sorted out the initial mess – Revenue might start looking at properties that seem to be undervalued. If they undertake such an exercise – they will probably just look at properties where  there is a big discrepancy between the estimate and the declared band. It is unlikely that Revenue will be going after cases within 1 or even 2 bands of the estimate . With self assessment – undervaluation is  going to be  to be more common with higher value houses. (You can’t drop down many bands if your house is only worth €160,000 !)

Revenue may decide to do their own valuation assessment where they have ” reason to believe that a self assessment is insufficient.”

They say they will not do an assessment where  ” a liable person has delivered a return which contains a full and true disclosure of all matters necessary for the establishment of the correct liability to local property tax

If someone does get picked out for undervaluing their house – and Revenue find that a false declaration was made – they may apply a penalty equal to the amount of property tax that should have been paid.   If the Revenue do an assessment on the value of your house they will inform you and you can appeal against it within 30 days.

It is unlikely that they will be looking at undervaluations until after they have got as many people as possible  to start paying the tax.


One thought on “What Happens if I Undervalue My House for Property Tax

  1. My apartment should be valued between 100,000 and 150,000 due to the current market prices. I can pay the amount applicable once I hear from you.
    Lorraine Stack

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