Sunday 18 February 2018

How our super-rich could avoid the worst of new levy

Charlie Weston Personal Finance Editor

PEOPLE who own mega-mansions on large plots of land could get away with paying a small amount of property tax because of the crude way property values are assessed by the taxman's online valuation calculator.

An expert has warned that the owners of the biggest properties could "get off the property tax hook" because of the inaccurate valuations.

However, there are severe penalties for under-valuing homes for property tax purposes, with those caught facing fines of €3,000 and even more for those who are self-employed.

Fears that the super-wealthy might escape the worst of the new tax were expressed after the Revenue website to value homes showed very low property values for the homes of celebrities like Bono, Yvonne Keating and businessman Michael O'Leary and former billionaire Sean Quinn.

This is because the calculator takes no account of the sizes of properties and the number of rooms.

All the valuation tool assesses is the location of the property, whether it is detached, terraced or a bungalow and when it was built.

The lack of detailed data behind the website has thrown up huge anomalies, with U2 Bono's mansion on Dalkey's 'Gold Coast' estimated to be worth between €550,000 and €600,000.

This would mean that Paul and Ali Hewson would pay just €517 for their Vico Road property this year. But one estimate puts the overall value at €2.5m, which would leave the property tax at €2,775.

And bankrupt Sean Quinn's mansion in Cavan is given a value of between €100,000 and €150,000.

Property experts said the Revenue's valuation tool was proving to be useless and giving homeowners little help in valuing their homes for the new tax.

Economist Ronan Lyons of the Daft.ie property website said many of the valuations on the new website were way off because the tax officials did not have sufficient data to put proper valuations on homes.

"The risk is that those who own the biggest properties are going to get off the hook on the property tax because the valuations are not accurate," he said. He warned homeowners not to rely on the Revenue's guidance tool for valuing properties for the new tax as the site gave false valuations.

Instead, neighbours should get together and hire a valuer at a discount.

Cheat

A property valuation is understood to cost between €120 and €200, plus VAT at 23pc. Estate agents carry out valuations.

But if 10 neighbours band together they may be able to have all their homes valued for €1,000, plus VAT.

Mr Lyons said people with large houses who tried to cheat on their property tax with a low property valuation might be caught out when Revenue officials cross-checked the income tax details. "Revenue will catch you eventually," he said.

President of the Society of Chartered Surveyors, Roland O'Connell, said homeowenrs would be better off looking at the State's property price register and websites like MyHome.ie and Daft.ie to get a valuation rather than the Revenue website.

"The Revenue's website has added to the confusion around this tax. But you can't necessarily blame them as they do not have the data on house sizes," Mr O'Connell said.

MyHome.ie has launched a facility on its website to estimate the property tax. And Daft.ie is launching a facility on its website to value homes today.

SEE: https://lpt.revenue.ie/ lpt-web/valuation-guide/ index.htm

Irish Independent

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