Property tax: Owners to decide on the value of their own home
Published 14/09/2012 | 05:00
HOMEOWNERS will assess the value of their own house to pay the property tax, the Irish Independent has confirmed.
It has also been revealed that there will be severe penalties for anyone who undervalues their house -- with the fines being imposed by the taxman.
Homeowners will simply tick off the value of their home on a checklist provided by the Revenue Commissioners.
This checklist will be posted out on July 1 next -- with a major publicity campaign being kicked off in March.
The Revenue Commissioners will police the payment by carrying out spot checks by comparing the values of houses in the same areas.
Residents will be given the choice of paying the tax by credit or debit card, cheque or taken directly from wages by the taxman.
The charge must raise €500m in badly needed revenues for the Government.
The Irish Independent has confirmed that the value of your home will fall into different bands, with the amount of tax to be paid rising with the value of the property.
The property tax is expected to be around €300 for an average, three-bedroom, semi-detached house.
But the different bands will mean the tax will range from about €250 to €400.
Homeowners in cities will end up paying more, because property values are higher and the tax treats the house as an asset.
The Revenue Commissioners will be in charge of collecting the payment and given powers to chase dodgers.
Revenue will carry out an information blitz ahead of next spring and will write directly to homeowners informing them of their obligations.
The form will contain personal details and offer various ways to make the payment, including by credit card, direct debit, instalments or monthly deductions from wages for PAYE workers.
The bands for home values are expected to be quite wide, giving homeowners' ample opportunity to assess the price of their house.
The initial deadline for payment is expected to by around the start of July, with penalties attached for late payment.
The Revenue will, meanwhile, build up information on the values of houses in different areas.
A property price register will also come online later this year, which will provide a guide to property values across the country.
And the database built up through payment of the household charge will be handed over to the Revenue at the start of next year, adding to the information available.
Revenue officials are already working behind the scenes with the local authorities in charge of putting this together.
The database is being compiled by the Local Government Management Association and the city and county councils.
The Government is currently working out the detail of the property tax, which will be formally announced in December's Budget.
However, sources said: "A lot of work has started on the administration side. We are not going to be starting from scratch at Budget time. From Revenue's side, a lot of work is being done on the database."
Ministers are basing their work on an expert report on the property tax.
The coalition is moving toward a pure market value model for the property tax, which measures the home in terms of its price if it was being sold.
The property tax is then calculated as a small percentage of the value of the house.
The Government is also considering a super property tax for owners of large, high-value homes.
The coalition is also trying to develop a system that factors in the income of the household, to protect those on low income.
Finance Minister Michael Noonan confirmed this week the property tax won't come into effect until the middle of next year.
As a result, homeowners will escape paying six months' worth of property tax in 2013. Householders will pay the full amount in 2014.
Homeowners will have the option of paying it in full, in instalments, or having it deducted from their wage packets.
The property tax will form part of the Budget announcement and then will be brought into effect by the Finance Bill in the New Year.
A decision also has to be taken on giving relief or a discount on the tax to homeowners who bought at the height of the property boom.
However, this is regarded as extremely difficult to introduce fairly.
The Government is also weighing up a system where owners of high-value houses would pay more.
One option is to bring in a super tax with a higher percentage rate for very expensive homes.
Such a model would help the Government to sell the idea to the public as homeowners would see the rich paying more.