Revenue at fault as confusion grows on home tax
HOMES with vastly different market values have been bunched together in the new Revenue Commissioners guidelines on the property tax, fuelling confusion over the controversial charge.
The online guide has been criticised for being too vague to help people, and could result in some homeowners paying the wrong rate of tax.
And the Irish Independent has discovered a series of discrepancies which show how homeowners face a much more difficult task than expected when valuing their homes for the tax.
It means that owners may have to carry out – or pay for – detailed research into what their homes are worth or run the risk of being fined up to €3,000 by Revenue for underpaying.
This is because the Revenue Commissioners has banded together homes with widely varying market values. In one town of more than 15,000 people, all semi-detached homes are classed as being worth between €150,000 and €200,000, regardless of the number of bedrooms or size of the garden.
However, sales data shows three houses with one, two and three bedrooms sold for different prices last year.
This would result in annual tax bills ranging from €404 in a full year to €224 – a difference of €180 a year.
Revenue has warned that homeowners must self-assess the tax, and will be liable if the tax is underpaid.
Fianna Fail finance spokesman Michael McGrath said the guide could lead to "more confusion", and could result in people overpaying.
"People were hoping it would give an accurate guide, and I am fearful that some will rely on the prices given for their area but those guide prices could result in them over or underpaying the tax due to the Revenue," Mr McGrath added.
"You would have to wonder how useful it is for people who are struggling to come up with an accurate valuation.
"If Revenue published indicative prices for an area, and were willing to accept valuations based on those, the entire initiative would be meaningful, but issuing guidance and then saying it's up to taxpayers to come up with an accurate valuation really undermines the entire process," Mr McGrath said.
"People can either rely on it or not. I think they can't, and if the guidance is misleading the homeowner will pay the price."
Householders who underpay their tax face being hit with fines of up to €3,000. If there is an overpayment, the excess will be refunded.
Some 1.66 million householders will be hit with the charge from this summer.
The Government expects to raise €500m in a full year, and expects more than 80pc to register by the end of the year.
The tax is levied at 0.18pc of the value of the property, up to a market value of €1m.
Expensive properties will be assessed at 0.18pc up to €1m, and 0.25pc on the portion of the value above €1m.
The Revenue Commissioners defended the online guide, saying it was designed to be used by the homeowner to calculate their tax bill.
It also warned people to take into account any "exceptional" features of their property – including large gardens or house extensions – which could inflate its value. If it was in a poor state of repair, the value could be reduced, which would lead to a lower tax bill.
People who relied on the guidance – which included consulting Revenue's guide, the Property Price register and examining valuations – would not have their bill challenged. Deliberate under-valuations would be investigated.
"Self-assessment requires you to honestly assess the value of your property. If you follow Revenue's guidance honestly, your valuation will not be challenged," a spokeswoman said.
"However, if you feel that the guidance is not indicating a reasonable valuation for your property, you should make your own assessment. Revenue will challenge cases where deliberate under-valuation occurred. You are responsible for ensuring that you choose the correct value band for your property."
From next year, dubious claims will be probed, the spokeswoman added.
"We expect (the Local Property Tax compliance programme) will focus on valuations which deviate significantly from the average value for the relevant property type and geographic location."
Owners will be able to check property values in their area on www.revenue.ie.
The valuations are based on a variety of sources, including the recently established property price register, the An Post geodirectory and stamp duty data. Other information, such as the 2011 Census results and 1,300 independent valuations carried out for the Revenue, were also used.
Payments must be made from July 1.
The Revenue property tax site is here.