The Local Property Tax (LPT) is a tax payable on the market value of residential properties. By now, all home owners and landlords should have received a letter and LPT return from Revenue, either by post or through ROS (Revenue Online Service).
If you haven’t yet received your return or you received one with incorrect details, you should contact Revenue immediately (email LPT@revenue.ie, call 1890 200 255 or write to LPT Branch, P.O. Box 1, Limerick). Keep details of telephone conversations and copies of emails/letters on file.
A return is due if you held a property on 1 May 2013. Where there is more than one owner, all owners are jointly and severally liable, but for administration purposes, one person must be nominated as the designated filer.
From 2014 onwards, you are liable to LPT if you held a property on 1 November of the previous year.
Deadline Dates 2013
7 May 2013: Due date for submitting paper Returns
28 May 2013: Due date for submitting return online
If you own more than one residential property or if you are already obliged to make your tax returns on-line, you must submit your return through ROS.
Calculation of Amount Due
Depending on the market value of your residential property, you will pay a different amount of LPT. An online calculator can be found here: http://www.revenue.ie/lpt_reckoner/index_en.html. Revenue have included an estimate of the market value on the form. This figure is not necessarily an accurate guide to the market value of your property, but it will be used in the event that you do not submit a return.
The market value to be included on the LPT1 form can be a valuation from a professional valuer or the taxpayer’s own assessment of the market value of the property. The Residential Property Price Register (www.propertypriceregister.ie), local estate agents and sites such as www.daft.ie can be used when researching the market value of your property. It is important to keep all documentation and calculations on file, as Revenue may wish to review your return. You should print off any web pages or save as a pdf, as they may not be accessible at a later date.
This market value will then form the basis for your LPT returns for 2013, 2014, 2015 and 2016. Once you have submitted your return for 2013, you do not need to submit another return until 7 November 2016 unless your circumstances change.
Remember that the charge in 2013 is for a half-year only. From 2014, a full year’s charge will apply.
You will need to indicate your preferred payment method on the return. LPT can be paid in a number of ways, including:
- Single debit authority, i.e. one automatic deduction from your bank account
- Debit/credit card
- Through approved payment service provides such as your local post office (either in full or by instalments)
- Deduction from your salary, occupational pension or certain social welfare payments
- Direct debit
Additional charges may be levied by your bank, credit card provider or a payment service provider.
Whatever payment method you choose, it will automatically apply to future years unless you inform Revenue otherwise.
Where there is an inability to pay, it is possible to defer the payment of LPT by completing the appropriate section of the return. However, interest will be charged at 4% per year on any deferrals. The deferred amount including interest will need to be paid before the property can be sold or transferred.
Deferrals are available to owner-occupiers only and not to landlords or second homes. For more information on deferrals, see the Revenue guide: http://www.revenue.ie/en/tax/lpt/local-property-tax-guide.pdf
There are a number of exemptions from LPT, as follows:
- New and unused properties purchased from a builder or developer between 1 January 2013 and 31 October 2016 are exempt until the end of 2016.
- Homes (main residences) purchased by first time buyers in 2013 are exempt until the end of 2016
- Properties on designated estates
- Properties not occupied by owner on medical grounds
For the full list, see the Revenue guide.
Note:if your property is exempt, you will still need to file the return.
Non-Submission of Return or Non-Payment
If you don’t pay LPT (or inform Revenue of the reasons you are not eligible to pay), Revenue can obtain the payment by:
- a deduction from your salary, pension or social welfare payment
- taking it directly from your bank account
- a referral to the Sheriff or a solicitor for collection
- reducing any tax refund due by the LPT amount
Interest of 8% per year will apply to late payment of LPT as well as penalties. The property cannot be sold or transferred until all LPT and interest has been paid.
For self-employed individuals, non-payment of LPT will result in an automatic late filing surcharge on your income tax return. This surcharge is calculated on 10% your income tax liability, not on the LPT payable. This also applies to Corporation Tax returns where a company holds a residential property.
As one of the payment options is a deduction from salary, employers will need to ensure that proper systems are in place. This may involve an upgrade to payroll software. Revenue will inform employers of any LPT deductions through the P2C system (notice of tax credits). Employers who pay by direct debit may need to adjust the monthly payment depending on the number of employees availing of this payment option.
Where an employee fails to pay LPT and Revenue demand a mandatory payroll deduction, the employer must comply.
Any unpaid household charge from 2012 will be converted into a LPT charge on 1 July 2013 and can be collected by Revenue as outlined above. Interest may be charged.
For landlords and second home owners, the NPPR charge is still due for 2013 but this will be the last year of payment.
LPT is not currently allowable against rental income.
The above is an outline of the Local Property Tax system. More information, including a Frequently Asked Questions section can be found on the Revenue website: http://www.revenue.ie/en/tax/lpt/index.html.
If you enjoyed this post, you might like to subscribe to our newsletter, which delivers free monthly tax updates, like this one, direct to your inbox. As always, if you have any queries of a general nature, please leave a comment below.