By Ted Healy of DNG TED HEALY

By now everyone will be aware that the Local Property Tax (LPT) return deadline is fast approaching on November 7.

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So this week we give a quick easy to follow guide on the LPT; who is liable, how properties are assessed, what rates apply and how to pay.

Who Pays?

In essence, residential properties suitable for use as a dwelling (occupied or unoccupied) are subject to LPT. Certain properties were and continue to be exempt from the LPT, including properties unoccupied for an extended period by an ill or infirm liable person, or properties affected by pyrite or mica.

Some previous exemptions, such as new or unused properties purchased or built after 2013 or properties in unfinished housing estates, will no longer apply and now fall liable for LPT in 2022 and thereafter.
The owner of the residential property is legally liable for the LPT.

How is it Assessed?

The LPT is a value based tax and uses market values at its core. It is a self assessment tax with the onus on the property owner to value the property. It was first introduced in 2013 with property values set at market values in May of that year.

This year has seen a number of reforms of the system with the valuation bands largely increased and a revaluation date of November 1, 2021. The amount payable in 2021 will apply for the next four years, until 2025.

Revenue have issued a Notice of Estimate to each household which outlines an estimated liability. It is important to note that this is a guide only and liable persons are still required to value their property.

They can do so by using a number of different valuation sources or guides, including Revenue's online interactive valuation guide, the Residential Property Price Register, the use of a professional valuer, local real estate agents, or commercial property sales websites such as daft.ie or myhome.ie.

Once the taxpayer submits the valuation, Revenue’s estimated liability will be replaced by the self-assessed property valuation and the respective LPT charge.

Failure to submit a LPT return or the submission of an undervaluation may be subject to a penalty of €1,000 or a challenge by Revenue. At the same time, Revenue will pursue the estimated LPT liability amount using the available collection and enforcement options.

What is the rate?

The tax rate is set by central Government and was initially 0.18% for properties up to a value of €1m, with a higher rate of 0.25% levied on more valuable properties.

Given the increase in property prices and the inevitable rise in LPT liabilities, the Government has widened the valuation bands and reduced the lower rate (to 0.1029%, with the higher rates of 0.25% and 0.3%).

The following are the new valuation bands:

Local authorities have the power to vary the basic rate up or down by 15% annually. Kerry County Council have levied an additional 7.5% on top of the basic LPT rate.

Who collects the tax?

Revenue will continue to collect the LPT, and offer multiple payment options. These include a single payment using a debit card, credit card, cash or cheque; phased payments/instalments (monthly Direct Debit or via an approved Payment Service Provider such as An Post), or deduction at source (from salary/occupational pension/Government department).