Business Property & Mortgages

Wednesday 3 September 2014

Revenue to decide value of homes for property tax

Fiach Kelly Political Correspondent

Published 07/01/2013 | 05:00

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THE Revenue will tell every homeowner in the country how much it thinks their home is worth -- and how much they should pay in property tax -- in letters to be distributed within weeks.

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The notices to be sent out shortly will tell homeowners the "indicative value" that the Revenue puts on their home.

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

The details come amid concerns over people deliberately undervaluing their homes or "price fixing" to save on their property tax bills.

The indicative values are also being compiled to help Revenue target those who boycott the charge or who fail to register.

In these cases, the Revenue will go ahead and use its own value to levy the tax. "We need a figure to be able to enforce," a spokeswoman said.

The Irish Independent has learned that letters to be sent out in March will give homeowners an individual price the Revenue believes their home to be worth, which will take into account where they live.

If the Revenue's valuation is used by a homeowner, they will not be challenged in future.

However, estimates straying from the Revenue's own "property specific" values are more likely to be inspected and challenged, leading to possible fines and penalties.

Leeway will be given for the condition of the property, or improvements carried out on a house, which could push the price up or down.

The taxman is currently compiling a database of every home in the country to provide the estimated value of each property.

Revenue is trawling through "third party details" like stamp duty records, electricity bills, rental details and records from the controversial €100 household charge to figure out the size and value of every home.

Revenue says it initially expects to only challenge a small number of cases, since its initial focus will be to make "sure the register is as complete as possible".

But as the register develops, there is expected to be a tighter focus on checking for discrepancies in the valuations of homes countrywide.

The property tax will be levied at a rate of 0.18pc of house value, with a higher "mansion tax" rate of 0.25pc on the value of a house over €1m. There will be up to 19 different valuation bands, starting at under €100,000 and increasing in €50,000 tranches.

The mid-point is taken on each band, and the 0.18pc is applied to that figure to calculate tax owed.

Dublin city dwellers are likely to pay an average property tax of €405, compared with their rural counterparts who will pay an average of €249.

"Revenue is developing a database of houses using third-party information," a spokeswoman said. "This will mean that an indicative property value will be available."

Guidelines on how to value your house and figure out how much you will pay will be sent out by the Revenue in March.

Those posting their returns have been given a deadline of May 7, with a deadline of May 28 set for online returns.

The tax kicks in from July 1, and only a half year is payable for 2013, with a full year's tax payable from 2014 onwards. The Revenue spokeswoman confirmed that those who did not register would be liable for the tax regardless, at the value set by the Revenue.

"Each return sent out by Revenue will include a notice of the 'Revenue estimate' of the tax due.

Where the liable person does not submit a return, the Revenue estimate will become payable by default," the spokeswoman said.

Meanwhile, it has been reported that the first-time buyer's exemption from the new property tax will be available to married couples, even if one spouse already owns a house.

Any first-time buyers who purchase a house before the end of the year are entitled to a waiver from property tax until 2016.

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