independent

Thursday 24 July 2014

'Tax estimate won't affect the value of properties'

Tax guess is wide of the mark

Dnal Nolan

Published 13/03/2013|05:36

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The local property tax valuation guide for bungalows in Kerry built before 2000. the white areas are for home valued in the €0 - €100,000 band; the beige areas are for homes in the €100,001 - €150,000 band; the light orange areas are homes in the €150,001 - €200,000 band.

the Revenue Commissioner's estimate of house values in Kerry is mostly wide of the mark but estate agents in Kerry do not believe this will affect house prices to any great degree.

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The blanket impostition of the same rates of valuation for entire areas means the system does not recognise the vast difference in property values in discrete locations. For instance, in Dingle and Listowel - as elsewhere nationally - detached, terraced and bungalow homes are valued the same for the purposes of the tax. However, the Renue Commissioners' estimate ignores the huge value that attaches to scenic sites, which could make a bungalow in Dunquin with a view of the Blaskets considerably more valuable than a similar home in the plains of north Kerry.

However, the tax is self-assessment based and this means it is up to the homeowners themselves to correct the Revenue Commissioners' errors. This is not a prospect people relish, according to Dingle auctioneer John 'Diony' O'Connor. "It's up to people themselves to put down what they think their properties are worth. One of the big concerns I am hearing this week from people is whether or not they will have to employ an estate agent."

Mr O'Connor does not feel the Revenue's home value estimates will have a huge bearing on the market, nor will people be put off purchasing homes with a higher level of tax.

One of the big issues within the west Kerry property market is the residency clause in planning permissions which means that any homes being built have to be owner-occupied. "This has a huge negative effect on the value of properties and I would hope the authorities would remove it to make the playing field much fairer."

In north Kerry, the often glaring difference in the quality of houses in a single area is not recognised by the system of tax valuation. "You could travel a mile down a single road and pass houses worth everything from €30,000 to €200,000," Listowel Sherry Fitzgerald agent Tom Dillon said.

"It's in its first year of life and I think the bands are at least big enough not to affect property prices. I don't think it will put people off buying in higher bands when things improve."

Meanwhile, the tax guide has determined that no property in the South Kerry area has a market value of more than €200,000.

In Killarney urban and rural areas, apartments/flats, semi-detached, terraced and bungalows have all been given a value estimate of between €100,001 and €150,000 and, therefore, are liable for an annual property tax of €225. The exception is detached homes, which have been placed in a higher-value band of between €150,001 and €200,000, and an annual property tax of €315.

A cursory glance at the Property Price Register reveals a huge disparity in sale prices in all housing types. For example, two apartments in Killarney town within a kilometre of one another recently sold for €80,000 and €198,000 respectively.

Although apartments in Killarney, according to Revenue's valuation, attract an annual tax of €225, the €80,000 property should be in the lowest property tax band - €90 annually – while the more expensive apartment is in the third band or €315 annually.

The same is true for houses. Detached homes in Killarney have been placed in the third tax band (€315). Looking at the Property Register, a detached home in Killarney recently sold for €1.14 million, while another sold for €200,000. By Revenue's reckoning these properties attract the same property tax, however according to their sale prices the €1.14million house should attract an annual tax of €2,150, while the less valuable property is in the €315 bracket.

Kerryman

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