PEOPLE with house extensions will have to pay more property tax than their neighbours.
Other home improvement measures such as kitchen refurbishments will also have to be included by homeowners when calculating the value of their home.
Finance Minister Michael Noonan has made it clear that homeowners cannot just rely on the property tax estimate being sent out to them in March by the Revenue. He said that homeowners will have to take extensions into account.
"Each owner will need to consider the specifics of his or her property, the area and any other local factors that influence the value when making his or her valuation assessment," he said.
He gave an example in the Dail of how someone with a house extension might calculate their property tax.
"If you have an extension built and all your neighbours are saying that their houses are valued between €150,000 and €200,000, but you've put another €75,000-€100,000 on it by way of extension, the normal thing would be to go up to the next band and say mine is worth between €200,000 and €250,000," he said.
Using this specific example, a person in a house worth €150,000 will pay a six-month property tax of €157 this year and a full year rate of €315 after that. But a next-door neighbour in the same type of house with a €75,000 extension will be pushed into the next property tax band, giving them a half-year property tax bill of €202 and a full year bill of €405.
Householders have to submit their valuation for their property by May 28 at the latest – and the property tax bill they pay will then be frozen at that rate for three years.
The property tax issue was raised in the Dail by Fine Gael Dublin North TD Alan Farrell, who warned that people might have to hire an estate agent to get a valuation.
"Many homeowners are under severe stress financially. Adding to the local property tax is not a step we should be taking," he said.
But Mr Noonan said that people could hire a valuation expert or carry out their own self-assessment using the guidance information supplied by the Revenue.
Mr Noonan said the Revenue would be drawing people's attention to the house price database, which already has details of 62,000 sales over the past three years. He also said people would be given information from the Revenue's stamp duty records.