Revenue goes after home-tax cheaters
HOMEOWNERS who deliberately undervalued their house for the property tax will be targeted in a clampdown by the Revenue Commissioners next year.
But fear of the taxman has resulted in a higher-than-expected yield from the tax as homeowners valued their houses above Revenue's advice, didn't try to evade the tax and didn't apply for a deferral.
The deadline for registering the method of payment for the property tax with Revenue passes on Wednesday.
The overall take from the first 18 months of the property tax will be €100m more than expected.
Revenue and the Department of
Finance put the increased property tax take largely down to timing issues:
* Homeowners paying the tax this year for next year.
* Household charge arrears from homeowners who refused to pay.
* Local authorities' liabilities being postponed to next year.
But this doesn't entirely account for such a substantial increase in the tax take.
Government sources attribute the higher take from returns for 2013 and 2014 to a number of factors, described generically as "taxpayer behaviour".
* Homeowners valuing their property above the estimate provided by Revenue.
* An extremely low level of deferrals, with just 18,000 people or 1.1pc of homeowners claiming inability to pay.
* More houses being declared. l Homeowners not trying to evade payment, with the compliance rate at 91pc.
"The estimate originally was a little bit conservative. You do that with a new tax. The yield is slightly higher than estimated," a senior government source said.
"It's based on an average house price. Some people went with a higher band than was suggested in the letter. There are also slightly more houses in the mix.
"You have far lower levels of deferrals than predicted. It was thought there would be eight to 10pc deferrals. Older people never want a debt hanging over them. People like the idea of paying their taxes. Depending on enforcement, the new estimate could go higher."
"It's probably a combination of all these factors. There's the estimate versus the self-assessment. You don't know what influences the decision. Revenue would have said their figure was only for guidance. People have a value of their own home. Some people overvalued and some undervalued," another source said.
Early in the new year, Revenue will go after what it refers to as "outliers" – homeowners who valued their house at less than other houses on the street.
Revenue will also use sophisticated software to show where there are anomalies.
The total take from the property tax in its first year-and-a-half of operation here will be €850m – €100m higher than the previous official estimate of €750m.