Property Tax Update
The new Local Property Tax (LPT) has been the subject of much widespread media coverage and we believe it is important to update you on it but also to mention two other Property Tax issues which are not so widely publicised.
1. LPT (LOCAL PROPERTY TAX)
By next week, Revenue have indicated that they will have issued 1.6 million LPT Forms (including Tax Estimates), meaning that every single residential property in the state will or should receive the form LPT1. As per our previous circular last December, we anticipated that Revenue would make every effort to collect this new tax and we are in no doubt but that they have already demonstrated their commitment in this regard.
Although we are available to assist clients with any LPT questions arising, it is notable that Revenue have chosen to not configure the ROS online service so that Accountants can file LPT Returns on behalf of clients. We have, however, devoted quite some time to analysing property values in County Cork via www.propertypriceregister.ie and we note that since January 2010, more than 7,000 residences have been recorded as sold in Cork City and County. Undoubtedly, 2010 values are quite a bit higher than the more recent 2012 values. Expert sources suggest that there could be further declines in Cork property values this year, by some 10%.
Many people will be aware already that LPT calculations for 2013 will also form the basis for 2014, 2015 and 2016. This means that there is a need to be particularly careful with valuing your property now. If the value is obviously out of line with the data recorded for any 2013 sales in your neighbourhood (www.propertypriceregister.ie), you could find yourself exposed to additional tax, interest and penalties. Therefore, people who choose to be less than careful with judging property values need to be aware that Self Assessment rules could prove to be expensive in years to come should under-estimates of current property values come to light. Self employed clients should be particularly aware that non-compliance with LPT will cause harm tax-wise to other self-assessed taxes.
You are very welcome to consult us about any issues or concerns you might have and are especially welcome to ask us to check our mastercopy of Cork property prices for details of relevant neighbourhood sales (over the past few months and years). Please see key dates for LPT, attached.
2. NPPR Tax (NON-PRINCIPAL PRIVATE RESIDENCE TAX)
This tax, €200 per property, continues to be chargeable in 2013 (abolished for 2014 and onwards). As before, it applies to any residential property which is not a principal private residence. The due date for payment of this tax is 30th June 2013. Typically, NPPR applies to both holiday homes and rental properties. Payments are to be made via www.nppr.ie.
3. Household Charge Tax
LPT has replaced this tax (which was €100 per house, for 2012). It has been widely reported that some 30% of households have not yet paid this tax. Payment (even if late) can be made by 30th April 2013 and this would result in a maximum amount due of €130. As and from 1st July 2013, all unpaid Household Charge Tax is being given to Revenue to collect and the €130 mentioned above will be “converted” into LPT of €200 on top of which Revenue say they will apply further interest for late payment. We strongly recommend that any Household Charge Tax due should be paid as soon as possible, via your Local Authority.