Saturday 27 December 2014

Experts warn Revenue home values may be 'wildly wrong'

Fiach Kelly and Charlie Weston

Published 08/01/2013 | 05:00

PROPERTY experts have cast doubt on the Revenue's ability to value every home in the country so it can tell the owners how much property tax it thinks they should pay.

Ronan Lyons, an economist with property website Daft.ie, said the taxman's approach would lead to horror stories of people being given wildly inaccurate values.

Letters to be sent out in the coming weeks will tell homeowners the "indicative value" the taxman has put on their property.

While owners will still be able to self-assess, those who deviate from the provided estimates face the prospect of inspections and challenges.

Anyone who hires a valuer – at their own expense – to assess the price of their home will go unchallenged.

The Revenue has said that any value chosen by homeowners this year – including those it suggests – will apply for three years.

This means that if a property is sold in a year or two at less than the value suggested by the Revenue, the seller will not be entitled to any tax refund.

Impossible

Mr Lyons said the Revenue has been handed an impossible task, and insists professional valuations are the only way to get the right information.

"The way it should have been done is self-assessed for the first year, and give people tax credits to have a professional valuation carried out," he said.

"Revenue will be taking a stab at valuations and then seeing if people contest it. They'll be effectively groping in the dark. We will hear horror stories of small houses being valued as much larger houses."

Others said the inactivity in the property market in some areas would make accurate valuations a daunting task.

Consumers Association chairman Michael Kilcoyne said it was too difficult to estimate values at the moment, especially as large tracts of the country had very low levels of sales.

He said that if the Revenue did not get its valuations right, prices would fall back at a time when strong signs were emerging that they are stabilising.

Ciaran Phelan, CEO of the Irish Brokers Association, warned that people who undervalue their homes for the new tax could end up in trouble if they then decided to sell.

He said: "A purchaser may be reluctant to agree to pay 20 to 30pc more than the most recently declared value, and the Revenue Commissioners could potentially hit you with back taxes and penalties in this event as the sale price will appear on the property price register for everyone to see."

Fianna Fail Seanad leader and finance spokesman Darragh O'Brien said the Government has "learnt nothing from the household charge fiasco".

"Reports that the value of homes will be dictated by the Revenue Commissioners and that self-assessment could lead to challenges from the taxman only add to the concerns of householders and raise even more questions," he said.

Irish Independent

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