Half of homeowners expected to pay €225 a year
THE Revenue Commissioners expects almost half of all homeowners in the State to pay €225 a year in property tax.
Despite major flaws being identified in how it values properties, the taxman says that 45.4pc of all homes are worth between €100,001 and €150,000, with less than 1,700 households expected to pay the higher tax, which applies to homes worth more than €1m.
But a technical document produced by Revenue, which shows how property valuations were arrived at, says that one in 10 of its assessments is "not very accurate".
The document also says that more than 700,000 of the State's 1.66 million homes may be classed in the incorrect bands.
The valuations are based on data from NAMA, stamp duty transactions, independent valuations conducted on behalf of Revenue and from the Property Price Register.
But there has been widespread criticism of the valuations being produced, because homes with wildly different market values are bunched together, adding to confusion.
The property tax guidelines published by Revenue on Sunday were slammed as being too vague to help people.
But the Revenue said no model could accurately value all properties, adding that its valuations complied with international standards.
"Property valuation is not an exact science," it says in 'Developing, Assessing and Deploying a Valuation Model for Local Property Tax'.
But it admits that a huge number of property valuations may be wrong. Just 41pc of all properties analysed in Dublin were placed in the correct tax band, compared with 53pc in other cities and across the rest of the country, it found.
This can have a huge effect on the amount of tax due as there are 19 different bands, ranging from the lowest at €90 a year to the highest at €1,665.
The analysis also says the model is "not very accurate" for one in 10 homes, with particular problems in Dublin.
"It appears from the training dataset that in about 10pc of properties, the model is not very accurate," it says.
Homeowners must include features such as large gardens and house extensions when sending in their returns for the self-assessed tax, which falls due on July 1 next.
Much of the focus this year will be on developing the national database of property owners, but next year the taxman will begin investigating under-payments.