Homeowners will be chased for tax when they sell on
Homeowners who deliberately undervalue their house for the property tax will be chased down for the arrears when they sell on.
New homebuyers who find the previous occupant substantially undervalued the house for the property tax will be obliged to snitch on them to the taxman and pay the higher rate.
And the sellers have to tell the buyers what value they put on the house for the property tax or else be fined €500.
The property tax legislation obliges the seller to tell the buyer the price declared to the Revenue Commissioners for the house.
The law obliges the buyer to submit a higher valuation where they are of the view the seller had undervalued the property.
"Revenue would then pursue the vendor for the underpaid local property tax based on a previous under-valuation," the Department of Finance said.
Also, local authority house tenants will be charged the lowest possible rate on the house.
But their neighbour who bought the house from the council will be obliged to pay the property tax based on the full market value.
It means two identical homes side by side in council estates will be charged different rates.
But there is no exemption for people who paid high levels of stamp duty and there is no change to the way the property tax is calculated.
Owners of Georgian houses and run-down shops in Limerick and Waterford cities will qualify for tax reliefs announced in yesterday's Finance Bill.
The move will benefit Finance Minister Michael Noonan's constituency, but government sources said the two cities had been chosen for a pilot scheme because they had the worst deprivation ratings.
Census data shows that Limerick city has the highest overall rate of unemployment and the highest rate of male unemployment of each of the five main cities. Waterford has the second highest.
Under the scheme, residents will be able to claim tax relief for the cost of the refurbishment in relevant Georgian houses, at the rate of of 10pc per year for 10 years, but only for years in which the house is the principal private residence of the person.
"This cannot be passed on when the house is sold," the spokesman said.
The Finance Minister can designate new areas for relief after consultation. Mr Noonan said in a statement that the amounts involved would be modest.
Houses owned by local authorities or approved housing bodies will be charged in the lowest band of property tax until 2016, whatever their actual value, the bill proposes.
The lowest band covers houses worth up to €100,000; so a €150,000 valued house would save €135 in tax. Normal valuations will apply after 2016.
Increases in value due to modifications to accommodate a disabled person may be disregarded for property tax, provided they continue to live in the property.