Local Property Tax

Friday 15 December 2017

This article outlines the main issues in regard to the whole area of Local Property Tax, its main source of information is taken directly from the Revenues own website www.Revenue.ie . Its purpose is only to give a brief summary of the issues involved and would be advised to contact us at Collins O’Brien with any specific LPT issue which you may have or refer directly to the Revenue’s website.

What is LPT

Local Property Tax (LPT) is an annual property tax charged on all residential properties in the State which came into effect in 2013. The LPT is collected by the Revenue Commissioners and is a tax which is a self-assessment tax which is based on the owners own assessment of the market value of the property.

What happens if you do not comply?

If you fail to meet your Local Property Tax (LPT) or Household Charge obligations, Revenue will use a range of collection and enforcement options to collect any tax due.

Revenue conducts a number of compliance campaigns to remind liable persons of their LPT obligations. If a response is not received within the specified time, Revenue utilises the following collection or enforcement options:

• mandatory deduction from salary or occupational pension

• the withholding of any refund of other tax as payment against LPT due

• withholding of Tax Clearance Certification

• LPT surcharge generated on Income Tax, Corporation Tax or Capital Gains Tax returns

• interest charges of 8% per annum and additional penalties may also apply

• referral of the debt to a sheriff or a solicitor for collection

• notice of attachment of the owner's bank account.

Who is liable for LPT and, or Household Charge?

If you are the owner of a residential property on:

• 1 May 2013, you are liable for Local Property Tax (LPT) for 2013

• 1 November 2013, you are liable for LPT for 2014 and so on for each year.

The liability date for LPT is 1 November each year. If you are the liable person for the property on 1 November, then you must pay LPT for the coming year.

Revenue estimate and filing a Local Property Tax (LPT) return

In 2013, Revenue notified property owners of their obligation to LPT. Owners of single properties received both a:

• Notice of Estimate of LPT

• Form LPT1 (Return for LPT).

For owners of more than one property, Revenue also issued log in details to manage your LPT online. This allows you to view the estimates for all your properties and file returns for them.

Valuing your property

Local Property Tax (LPT) is a self assessed tax. You must determine the market value of any property for which you are the liable person. You must determine the market value of each property as at the valuation date of 1 May 2013.

This valuation applies to your property for a seven year period up to and including 2019. This valuation will not be affected by:

• any repairs or improvements made to your property

• any general increase or decrease in property prices, during this period

• any event after 1 May 2013 that negatively impacts on your valuation, for example, flooding or erosion.

The next valuation date will be on 1 November 2019. You must declare the valuation for your property in your LPT1 return. If you do not file your LPT1 return Revenue will estimate your liability to LPT. When you file your LPT1 return with your own determination of the value of your property, Revenue will remove the estimate.

Is your property liable for Local Property Tax (LPT)?

A property is liable for Local Property Tax (LPT) if it was a residential property on the valuation date of 1 May 2013. You are liable to pay LPT if you are the owner of a liable property on the liability dates. Commercial properties are generally not liable to LPT.

Each property will have a unique property identification number (ID) for LPT purposes. This ID number is provided to you on official correspondence and should be retained and used in all LPT correspondence. You will also be provided with a PIN number for accessing your LPT account online at Login to LPT online. Your PIN will also be quoted on official correspondence and is required to securely access the LPT online system.

The property ID number, the PIN number and your Personal Public Service Number (PPSN) or Tax Reference Number are required to successfully access your LPT record online. If you need to request a property ID and PIN number, enter your PPSN or Tax Reference Number when you Login to LPT online. Your Property ID or PIN will be posted to you at the address on file for the PPSN or Tax Reference Number you supplied.

Selling, buying or transferring a property

When selling, buying or transferring a property there are certain duties on both the seller and the buyer. It is important that Local Property Tax (LPT) clearance is in place prior to the closing of the sale or transfer of the property. The LPT return and all LPT payments must be made before completion of the sale. If you claimed an exemption from LPT, your record will show that your property is exempt.

If you are a liable owner of a property on the liability date you are liable to pay the LPT. The liability date for LPT for 2013 is 1 May 2013 and for any other year it is 1 November in the preceding year.

Deferral of payment

In certain circumstances you can defer or partially defer the payment of your Local Property Tax (LPT). Deferral arrangements are available where there is an inability to pay and certain specified conditions are met. A qualifying person may opt to defer, or partially defer, payment of the tax.

Where a person qualifies for a full deferral then 100% of the liability can be deferred. Where a person qualifies for partial deferral, then 50% of the liability can be deferred. The balance of 50% of the tax must be paid.

There are a number of conditions that must be met to qualify for a deferral. In the main the income of the individual must be below €15,000 for a full deferral and below €25,000 for a partial deferral. (€25,000 and €35,000 thresholds apply for couples). These thresholds can be increased by 80% of gross mortgage interest payments.

Deferral is not an exemption. Payment of the LPT is deferred. The deferred LPT becomes payable later and carries an interest charge of 4% per annum. The deferred LPT remains a charge on the property until it is paid. Any outstanding charge, including interest, must be paid to Revenue when the property is sold or transferred to another person.

There are four separate categories of deferral of LPT available:

• income threshold

• personal representatives of a deceased liable person

• personal insolvency

• hardship grounds.

Employers

Deduction at Source

A property owner can pay their Local Property Tax (LPT) from salary or occupational pension spread over the year by Deduction at Source (DAS).

Employers and pension providers are obliged to make DAS available to their employees or pensioners.

When this payment option is selected, Revenue notifies the employer or pension provider of the amount of LPT to be deducted.

You, as an employer or pension provider, must deduct LPT once notified. Revenue DAS instructions can be issued at any time throughout the year and must be acted on. You must account for and pay the deducted LPT to Revenue on Forms P30, P35 and P35L, as well as on any amendments to these forms.

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