Given the variety of property taxes introduced under austerity, namely the NPPR, LPT and the Household Charge, homeowners could be forgiven for losing track of what payments were due and when. However, Revenue will be in no mood to forgive anyone who has yet to make any payments - and will seek to impose stiff penalties.
Two recent reports in the Irish Times highlighted both the magnitude of the charges that have accrued for non compliant homeowners – as well as potential additional charges even for those who have made all payments due. Non compliant homeowners were reminded last week that the non-principal private residence (NPPR) “amnesty” will expire on 31 August and from 01 September, any owner who has yet to pay the NPPR will owe €7,320 in unpaid charges per property, inclusive of penalties and interest.
The annual €200 NPPR tax was introduced in July 2009 and was due on properties such as rental units or holiday homes; i.e. properties that were not an individual’s “main” house or principal private residence. If left unpaid, monthly penalties have accrued and an additional 50% of the amount outstanding will be added on 01 September, bringing the total due to €7,320.
But it wasn’t just the non-compliant homeowners who were singled out. Seemingly compliant homeowners were warned last Thursday that they face a Revenue assessment and potentially additional LPT charges if they sell their house for more than the value they estimated in May 2013.
The Times reported that “hundreds of homeowners have had to pay additional property tax to the Revenue Commissioners before being able to sell their properties”. If a home is sold for 15 per cent over its estimated May 2013 value, the vendor faces a Revenue assessment. The Times went on to outline that there were 3,900 properties where the owner had self-corrected their valuation band upwards, with most of these corrections were lodged in advance of sales.
While the article did advise that Revenue will provide sale clearance if the valuation placed in May 2013 was made in good faith and was broadly accurate, it is important for taxpayers to be aware of their rights, as well as their obligations. This includes the right to contest a Revenue valuation, regardless of the increase in value in the intervening period.
The key date for valuation purposes was 01 May 2013. If the value placed on the property on that date is reasonably arrived at, homeowners will not be obliged to accept a subsequent “revaluation” proposed by Revenue. That Revenue will assess the original valuation in cases where there is a 15% uplift in value seems reasonable. However, with reputable sources claiming Dublin prices have increased by as much as 25% in the year to June 2014, homeowners who believe their May 2013 assessment was accurate and defensible may opt to exercise their right to challenge any Revenue assessment raised.
Find out more about the Irish budget 2016.
Evidence such as sale price of similar houses in the area or an official valuation by an industry professional would provide the greatest level of comfort. If you have any queries about your Irish tax affairs, click here to find out more.