Homeowners will have to provide documentary proof to back up their Local Property Tax (LPT) valuations if Revenue suspects a property’s value has been dishonestly lowered.
The claim has been made by tax authorities in a memo to accountancy bodies seen by the Irish Independent.
The details are the first indication of how Revenue plans to police the hundreds of thousands of new self-assessed property valuations being submitted by homeowners ahead of Sunday’s deadline.
Suspicions have been raised about valuations being submitted for the self-assessed tax. This comes after it emerged that one-third of homeowners who had submitted a valuation by the end of last week said their home is worth less than €200,000.
Revenue said it will not overturn a valuation where a property owner has made an honest estimate and can provide supporting documents.
However, if the valuation cannot be supported, Revenue will engage with the property owner to agree a revised valuation.
Revenue said it has been checking valuations over the past few years, and just a small number of homeowners were found to be undervaluing.
However, if it has concerns about a self-assessed valuation, it will ask the owner to support it with evidence.
Statistics from Revenue show 31pc of property owners had submitted a valuation by the end of last week of under €200,000. They will face an annual LPT bill of €90.
The figures show most homeowners who have valued their homes opted for the two lowest valuation bands; 21pc told tax officials their property is worth less than €262,500. This means more than half of property owners who have so far submitted a valuation will pay less than €225 a year.
The large number of homes that have been valued under €262,500 has raised eyebrows.
Further confusion has been caused by comments from a Revenue official, quoted in the Irish Times, that there would be “no penalties or extra suspicion” of people picking one valuation band lower than their home is worth.
Accountants, under the umbrella of the Consultative Committee of Accountancy Bodies, sought clarification from Revenue on valuations that are too low.
Where a property owner has made an honest estimate, and can provide supporting documentation, Revenue will not seek to overturn a valuation.
“However, where the valuation cannot be supported, Revenue will engage with the property owner to agree a revised valuation.”
Norah Collender, of Chartered Accountants Ireland (CAI), said homeowners would be wise to keep all documentation if they opt for a valuation band different to the one suggested in a Local Property Tax (LPT) letter they received from Revenue.