Homes

Saturday 26 July 2014

Thousands of homeowners are due property tax refund

Charlie Weston Personal Finance Editor

Published 10/05/2014|02:30

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Thousands of people are entitled to a property tax refund
Thousands of people are entitled to a property tax refund

THOUSANDS of people who bought homes last year are entitled to get a refund on their property tax.

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And these people will not have to pay the tax on their homes until 2016, Revenue and the Department of Finance have confirmed.

A blunder in the wording of the property tax legislation means all owner-occupiers who bought homes last year are exempted. The exemption was only supposed to apply to first-time buyers and those purchasing brand-new properties to live in.

The mistake was first highlighted in the Irish Independent.

Now Revenue and Finance Minister Michael Noonan have confirmed that 3,000 property owners are entitled to claim an exemption from the tax.

Mr Noonan said: "It is estimated that approximately 3,000 property owners may be entitled to relief under Section 8 (of the property tax act)."

The tax authorities have written to 1,500 home buyers to tell them they are due a refund, and around 600 of these have gotten money back. Revenue has yet to make contact with another 1,500 people who paid the tax for 2013, even though they were exempt, MrNoonan revealed to Fianna Fail's Michael Mc-Grath in a Dail response.

The tax on a €240,000 house was around €200 for last year and €400 for this year.

Over the entire period in question, the homeowner will save about €1,400 – money that should have been paid to the Revenue. This means the loss to the State from the poor wording of the property tax legislation could be €4.2m over the three years.

Sloppy wording in the law that gave effect to the property tax means that people who bought a home last year were due a three-year exemption.

Revenue officials knew about the blunder since last summer, but the issue only came to attention when it was revealed in the Irish Independent last November. By that time, thousands of people had paid the property tax, even though they were not liable for it.

Mr Noonan admitted: "It was originally intended that this exemption would only apply to first-time buyers. However, the exemption was deemed by Revenue to benefit any buyer, not just a first-time buyer."

Brendan Burgess, founder of Askaboutmoney.com, who discovered the loophole, criticised Revenue's handling of the issue.

He said: "Many people who are exempt have paid the tax unnecessarily and now there will have to be a big refunds exercise.

"This could have been avoided if they had gone public as soon as they discovered it."

Irish Independent

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