Local Property Tax (LPT) Effective From 1st July 2013

The EU/IMF Programme of Financial Support for Ireland commits the Government to the introduction of a property tax; accordingly the Government introduced the Household Charge in 2012 as an interim measure.  The 2013 Budget announced the introduction of a more comprehensive and equitable valuation based property tax with effect from 01^st July 2013, with penalties attached for late payment.  As a result, homeowners will escape paying six months worth of property tax in 2013. Householders will pay the full amount in 2014.

The Revenue Commissioners will be in charge of collecting the payment and given powers to chase those who attempt to avoid it. 

How will Revenue know who to contact?

• Revenue data and other sources such as Local Government Management Agency (LGMA) Household Charge data, Non-Principal Private Residence (NPPR) data and Private Residential Tenancies Board (PRTB) data
• Once LPT legislation is enacted, Revenue will have the necessary statutory basis to obtain information from other bodies, such as utility providers, which will be used to further develop the register of residential properties. This will allow Revenue to contact liable persons in March 2013

How will LPT be calculated?

• LPT will be administered by Revenue and a half-year charge will apply in 2013
• LPT will be charged on all residential properties in the State, including rental properties
• The market value of residential properties on 1 May 2013 will be the basis of assessment for the tax
• Revenue will write to residential property owners in March 2013 and will include an LPT Return form for completion along with an LPT explanatory booklet
• The booklet will explain everything you will need to know about assessing the value of your property, working out how much you will have to pay, completing the LPT Return form, and deciding what option will suit you best to pay your LPT
• The return that you submit in 2013 will be valid for the years 2013 to 2016 unless your circumstances change or you wish to select an alternative payment method

How much LPT will you pay?

• The initial band will be €0 - €100,000
• Subsequent bands will be organised in values of €50,000 width up to €1,000,000
• The tax liability will be calculated by applying the tax rate to the mid-point of the band
• The rate of LPT will be 0.18% for properties up to a market value of €1m
• Residential properties valued over €1m will be assessed at the actual value at 0.18% on the first €1m in value and 0.25% on the portion of the value above €1m (no banding will apply)
• Revenue has developed an on-line LPT calculator, which is available from the Revenue website at http://www.revenue.ie/lpt_reckoner/index_en.html to assist you in the calculation process

LPT Payment Methods available

• The completed LPT Return form will have to be sent back to Revenue by 7 May 2013 if filing a paper form
• If you file your LPT Return form electronically you will have until 28 May 2013 to file it online through www.revenue.ie
• The return that you submit in 2013 will be valid for the years 2013 to 2016 unless your circumstances change or you wish to select an alternative payment method
• If you opt for a phased payment arrangement, such as direct debit or deduction at source, payment will be spread evenly over the remainder of the year and will commence from 1 July 2013
• It can be deducted from their wages and remitted to the Revenue by your employer

Once guidelines are issued we will upgrade the payroll software as necessary in good time, prior to any deadlines, to include a facility for the employer to deduct LPT from employees pay if requested to do so.

For further information visit the Revenue website to view the LPT FAQ document published on 05th December 2012.