Local Property Tax Update

A brief guide to assessment and the changes to be introduced by the Finance (Local Property Tax) (Amendment) Bill 2021

July 7, 2021

What is The Local Property Tax?

The Local Property Tax (LPT) came into effect in 2013 and is an annual charge on all residential property. Therefore it is payable on any property that is used as, or is suitable for use as, a dwelling. The tax is calculated on the market value of the property.

There are 20 different LPT bands to cover increasing property values. For more details on how it is assessed and who is liable to pay you can see our previous article on the Local Property Tax by clicking here

What are the proposed changes?

While the full text of the Bill has not yet been published the heads of the Bill released provides an overview of the measures to be introduced. There are two primary areas of change;

A. Properties will be revalued.

Since its introduction the valuation date for properties being assessed for LPT was the 1st May 2013. This was due to be updated on an ongoing basis but for various reasons has not yet occurred until now.

The new amendment to the Act will mean properties being revalued for LPT on the 1st November 2021 and thereafter to be reviewed every four years. Given the general trend of increased property prices since 2013 most properties will see an increased valuation.

B. Some exemptions will end and others may change in scope.

LPT will now apply to first-time buyers who purchased their property during 2013, to all new homes bought since 2013 and homes in defined “ghost estates”. These categories were previously exempt from the charge.

The exemption for defined pyrite damaged properties will be phased out but it is envisaged that a new exemption will be created for defined homes that are eligible for the ‘Defective Concrete Blocks Grant Scheme’ that is Mica affected homes.

Under the current scheme homes vacated due to illness may be exempt from LPT. However this exemption required that the property not be occupied by another person. The non-occupation requirement is due to be removed. This would allow owners to rent the properties or have a person reside there for security or maintenance purposes.

Will I have to pay more tax?

Although property prices will generally be increasing the bands used to calculate what you pay are also being adjusted to offset this in terms of the tax to be paid as seen in the table below. There will still be 20 Bands but the widening of the bands should mean that many homes will pay the same amount of LPT as the bands are adjusted to match the increasing valuations.

	Current Band Structure		Proposed for 2021
	Band (Value)	LPT Charge	Band (Value)	LPT Charge
1	0 – 100,000	90	1 -200,000	90
2	100,001 – 150,000	225	200,000 -262,500	225
3	150,001 – 200,000	315	262,501 - 350,000	315
4	200,001 – 250,000	405	350,000 -437,500	405
5	250,001 – 300,000	495	437,501- 525,000	495
6	300,001 – 350,000	585	525,001-612,500	585
7	350,001 – 400,000	675	612,501 - 700,000	675
8	400,001 – 450,000	765	700,001- 787,500	765
9	450,001 – 500,000	855	787,501 – 875,000	855
10	500,001 – 550,000	945	875,001 – 962,500	945
11	550,001 – 600,000	1035	962,501 – 1,050,000	1035
12	600,001 – 650,000	1125	1,050,001 – 1,137,500	1190
13	650,001 – 700,000	1215	1,137,501 – 1,225,000	1409
14	700,001 – 750,000	1305	1,225,001 – 1,312,000	1627
15	750,001 – 800,000	1395	1,312,501 – 1,400,000	1846
16	800,001 – 850,000	1485	1,400,001 – 1,487,500	2065
17	850,001 – 900,000	1575	1,487,501 – 1,575,000	2284
18	900,001 – 950,000	1665	1,575,001 – 1,662,500	2502
19	950,001 – 1,000,000	1755	1,662,501 – 1,750,000	2721
20	Over €1m	Percentage based	1750001	2830

Department of Finance officials estimate that;

11% of homes will see a decrease in LPT;
53% of homes will see no change in the LPT applied;
33% of homes will see an increase of up to €100 by moving up one band;
3% of homes will see a larger increase of up to €200 by moving up two bands.

Of course, those previously exempt will now face paying LPT for the first time.

Buying or Selling Property

When buying or selling a residential property it is essential that all matters relating to LPT (and Household Charge and Non-Principal Private Residence Charges) should be resolved at the earliest opportunity. If you are considering buying or selling in the second half of 2021 or in 2022, delays and issues may arise with the change in the legislation if the LPT is not filed correctly.

The owner as of 1st November 2020 is liable to pay the 2021 charge at the current rate and the owner as of 1st November 2021 will have to file the adjusted valuation for 2022. A sale may not close on time where incorrect valuations or payments have been filed incorrectly. There are strict Revenue guidelines on the obligations of vendors and purchasers which need to be followed in such transactions.

If you have any queries in relation to making a Local Property Tax return, your property valuation or potential exemptions please contact us on 01-6770335 or at info@joyntcrawford.ie and we will be glad to assist with you query.

David Lynch

Partner

Property, Company law and Commercial law