Local Property Tax (LPT) and Other Property Tax Updates
The new Local Property Tax (LPT) has received widespread media coverage, so we want to update you on it, along with two other property tax issues that have not been as widely publicized.
1. Local Property Tax (LPT)
By next week, Revenue has indicated that they will have issued 1.6 million LPT Forms (including Tax Estimates), meaning that every residential property in the state will or should receive the form LPT1. As we mentioned in our previous circular last December, we expected Revenue to make every effort to collect this new tax, and it’s clear that they are committed to this.
While we are available to assist clients with any LPT-related questions, it's important to note that Revenue has not configured the ROS online service to allow accountants to file LPT Returns on behalf of clients. However, we have devoted considerable time to analysing property values in County Cork via www.propertypriceregister.ie. We found that since January 2010, over 7,000 residences have been recorded as sold in Cork City and County. It’s worth noting that 2010 values are generally higher than the more recent 2012 values. Expert sources suggest that property values in Cork could decline further by about 10% this year.
It’s important to be cautious when valuing your property for LPT purposes, as the valuations for 2013 will also form the basis for the years 2014, 2015, and 2016. If your property’s value is significantly out of line with the 2013 sales data in your neighbourhood (available at www.propertypriceregister.ie), you may be exposed to additional tax, interest, and penalties. Those who choose to be less cautious with property valuation should be aware that underestimations could prove costly in future years if they come to light. Self-employed clients should be particularly aware that non-compliance with LPT could negatively affect other self-assessed taxes.
We encourage you to consult us with any concerns you might have and are happy to assist by checking our master copy of Cork property prices, which includes details of relevant neighborhood sales from the past few months and years. Please refer to the attached key dates for LPT.
2. NPPR Tax (Non-Principal Private Residence Tax)
This tax, which is €200 per property, continues to be chargeable in 2013 but will be abolished from 2014 onwards. It applies to any residential property that is not a principal private residence, such as holiday homes and rental properties. The due date for payment of this tax is June 30, 2013. Payments can be made via www.nppr.ie.
3. Household Charge Tax
The LPT has replaced the Household Charge Tax, which was €100 per house in 2012. It has been widely reported that around 30% of households have not yet paid this tax. Late payments can still be made by April 30, 2013, resulting in a maximum amount due of €130. Starting July 1, 2013, all unpaid Household Charge Tax will be handed over to Revenue for collection, and the €130 will be converted into LPT of €200. Revenue has also stated that further interest will be applied for late payment.
We strongly recommend paying any outstanding Household Charge Tax as soon as possible via your Local Authority.
Related content
