Saturday 25 October 2014

Property tax bill as high as €15,000 for some well-off homeowners

Published 06/12/2012 | 13:00

WEALTHY homeowners will be hit with four-figure property tax bills after splurging on upmarket properties.

That is because an exclusive group of some 2,500 people who live in homes worth more than €1m will be hit with a higher rate of tax on their trophy homes.

And at least one homeowner who purchased in recent months will be hit with a bill of almost €15,000.

The owner of Lissadell on Dublin's upmarket Shrewsbury Road, which sold for €6m last October, will be forced to pay €14,300 a year.

The property tax will be levied at a rate of 0.18pc on properties worth up to €1m, and 0.25pc on the balance of the value of homes in excess of that.

At least 20 homes valued at more than €1m have been sold in Dublin in the last three months, all of which will be hit with the higher rate, but expensive properties have been sold in all counties, despite the downturn.

The Property Price Register says a house in Glandore, Co Cork, called Seamark, sold for €3.7m. This means the annual property tax will be €8,550.

A house called Tir na mBeo in Delgany, Co Wicklow, which sold for €1,010,000 in August, will be hit with a bill of €1,825. In Galway, 15 Liocarrig on Threadneedle Road, which sold at €1.4m, will incur a bill of €2,800.

The move to tax higher earners is considered a victory for the Labour Party, which had wanted the well-off to contribute more.

However, auctioneers said that the higher rate should only have been applied to homes valued at more than €2m. Managing director of Lisney's, James Nugent, said one positive was that the higher rate was only applied on the balance above €1m.

"It is good that the upper 0.25pc rate is only applicable on the balance above €1m rather than on the full value of the property," he said.

"However, we believe this €1m threshold should be increased to at least €2m. It is also welcome that certainty is provided to homeowners for the next three-and-a-half years and the value base will be fixed until 2016, as will the rates."

The new property tax will take effect from July 1, 2013.

Homeowners will have a range of payment options, including paying by direct debit, in cash, by credit card or having the tax deducted at source.

Owners will be asked to assess the value of their property themselves, based on valuation guidelines to be issued by Revenue, and the initial valuation will be valid to the end of 2016.

Irish Independent Supplement

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