LPT Exemptions

Initial General Exemptions

There have been and are a number of exemptions from Local Property Tax, including as follows:

• that the property has been vacant and vacated by its occupant for at least 12 months due to long term physical or mental infirmity certified by a registered doctor.
• Vacant for less than 12 months and it is certified by a registered medical doctor that  the person is unlikely to resume occupation provided it is not occupied by another.
• Property used for the care of persons suffering from long-term physical infirmities registered under the nursing homes legislation.
• Newly constructed properties which have been completed but not sold or occupied as a dwelling, produce no income and are held as trading stock (amended 2021).
• Properties held by certain charities used for special needs accommodation.
• Properties purchased by a first-time buyer in 2013 and occupied as a sole residence.    The exemptions applied for tax due to the end of 2016.  The exemption was intended to apply to a first time buyer.  It appears to apply to all buyers due to legislative oversight. The no longer apply.
• New and unused property acquired from a builder or developer prior to 2017.(amended 2021).
• Houses located in unfinished estates included in lists drawn up by the Department of the Environment.(amended 2021).
• Certain property certified as having pyrite damages enjoy a three-year exemption.
• Diplomatic properties
• Properties fully subject to commercial rates.
• Mobile homes, vehicles or vessels.
• Residential property occupied by charities or for recreational activities connected with charitable purposes.
• Residential properties purchased or adapted for occupation by permanently or totally incapacitated persons where an award has been made or by the PIAB or a trust has been established for such individual.  Cost of adaptations must exceed a certain threshold.

The application of certain exemptions is subject to a claim being made on a return submitted to Revenue. Formerly exempt properties were not subject to, for example, provisions relating to the submission of returns. The amendment provides for an exemption while requiring that other provisions of the Act will continue to apply.

Defective Properties

Detailed provisions are made regarding certification of houses that qualify for the exemption based on having significant pyritic damage. The exemption was extended to properties whose owners don’t have the required certification, but whose properties are nonetheless have been damaged by pyrite.

It was extended to properties included in the official pyrite remediation scheme without testing, properties remediated as a result of successful insurance claim or properties remediated by the builder or property developer who constructed the property. The period of exemption for such properties was extended from three to six years starting with the first liability date following certification or acceptance into a scheme etc.

A new exemption was  introduced by the 2021 Act for properties that are eligible for the remediation scheme provided for under the Dwellings Damaged by the Use of Defective Concrete Blocks in Construction (Remediation) (Financial Assistance) Regulations 2020 (S.I. 25 of 2020). Other exemptions are being terminated or phased out. Exemptions will no longer be available for a full valuation period where the qualifying conditions for the exemption cease to be met during this period.

There is an exemption for properties damaged by pyrite. The 2021 Act provides for the  phasing out of the exemption, which will cease to apply for new applicants after the end of the 2-year period following the Act.

There is an  exemption for properties that are eligible for the MICA remediation scheme provided for under the MICA Dwellings Damaged by the Use of Defective Concrete Blocks in Construction (Remediation) (Financial Assistance) Regulations 2020 (S.I. 25 of 2020). This exemption will be available for a fixed period of 6 years.

The Revenue may request information from the Pyrite Resolution Board  in relation to the above exemptions etc.

Incapacitated

There was an  exemption for certain properties that have been acquired or adapted because of their suitability for occupation by individuals who are permanently and totally incapacitated. The terms of the exemption were amended in 2016.

The exemption was extended to incapacitated individuals who have not received an award from PIAB or court or benefitted from a public trust.he Revenue may request information from the Pyrite Resolution Board and the Personal Injuries Board in relation to the above exemptions etc.

A property that was vacated by a liable person due to long term mental or physical infirmity may be occupied by another person, who was not  liable for LPT, without losing the exemption.

Under the 2021 Act, the chargeable value of property is reduced where it has been adapted for occupation by a person with a disability, where the adaptation has the effect of increasing the market value. There is a fixed reduction of €50,000 instead of a variable reduction determined by the amount of chargeable value attributable to adaptation. The relief extends to properties that were not grant aided by a local authority provided the reduction is confirmed by Revenue.

The €50,000 fixed reduction takes effect for the year 2017 forward.  The exception is subject to confirmation from Revenue that the exemption is available in the particular case. Properties so occupied must meet the remainder of the original qualifying conditions. An application is made to Revenue with medical evidence from the applicant’s doctor.

Information required includes particulars of the adaptation of property, value, the nature and extent of incapacity and the effect on mobility. Revenue  publish guidelines in  relation to the application for certification.

Expired Exemptions

Several Exemptions have expired or no longer apply. The period of exemption applicable to 2016 for new houses,was extended to 2019. It applies to purchase of new houses from builders and property developers.

The exemption for the unsold properties held as trading stock of builders/developers in May 2013 applies to the liability dates for LPT payable for the years 2013 to 2021). This exemption is not  available after 2021.

The exemption for ‘first-time buyers’ applied from  2013 to 2021). This exemption is not available after 2021.The first-time buyer exemption was subject to terms and conditions.  The property must be the person’s sole or main residence.  If it is sold before 2016, the exemption is lost. The same applies if it ceases to be the person’s principal residence by that date.

The liability dates for which the exemption for unfinished housing estates applied for the liability dates for the years 2013 to 2021. This exemption is  not available after 2021.

Income Based & Like Relief

The following arrangements may be available in certain circumstances

• Personal representatives of a deceased may defer for a period subject to conditions.
• Person who has entered an insolvency arrangement or bankruptcy may defer.
• A person liable who cannot pay without  excessive hardship may defer payment; application for deferral must be made.

Certain persons qualify for full deferral .  Where deferral applies 100% may be deferred.  A person can opt for a 50% deferral and must pay the balance.

Deferral conditions include the following:

• Person whose income is unlikely to exceed €15,000 for a single person, €25,000 for a couple.
• Gross income of €15 to €25,000 is increased by 80% of the gross mortgage interest payments a person is likely to pay; in this case full deferral is available.
• A person whose income is unlikely to exceed €25,000 for a single person and €35,000 for the couple.  In this case a partial relief applies and the mortgage is not taken into account.
• A person whose income is  above the thresholds is increased by 80% of the gross mortgage interest payments but only until 2018.

Deferral Issues

The annual income thresholds below which LPT liabilities can be deferred were increased by the 2021 Act. The annual rate of interest charged on deferred liabilities was reduced from 4 per cent to 3 per cent.

The 2021 Act reduces the deferral interest rate from the current daily rate of 0.011 percent (annual rate of 4 percent) to 0.008 percent (annual rate of 3 percent) in respect of LPT liabilities deferred for the year 2022 and subsequent years.

The annual income thresholds below which a liable person is eligible for a deferral are.

• for a single person €18,000.
• for a married or co-habiting couple €30,000.

The marginal relief thresholds for owner-occupiers whose income is not more than €10,000 above the standard thresholds  allows deferrals of up to 50 percent of the LPT liability from €25,000 to €30,000 for a single person and from €35,000 to €42,000 for a married or co-habiting couple.

There is an adjusted income threshold for owner-occupiers who have an outstanding mortgage, where a person’s annual income less 80 percent of mortgage interest paid is less than the standard thresholds (currently €15,000 and €25,000). Marginal relief of 50 percent also applies where a person’s adjusted income is not more than €10,000 above the adjusted standard income thresholds (currently €25,000 and €35,000). The 2021 Act phases out this deferral option so that it will only be available after 31 December 2020 for owner-occupiers who are already eligible for it.

This is the interest on deferred LPT.

Per Reps & Like

Personal representatives of a deceased estate are liable.   There is a 12 month grace period for an intestate estate or where the executor predeceased the deceased.  After this has expired, persons in occupation or in receipt of rents are liable to the tax even before the grant of representation issues.

Accordingly, a caretaker may be liable once this twelve-month period has expired.  A deferral of tax can be granted where no grant has been taken out within the first 12 months in respect of unpaid tax at death, deferred LPT on the part of the deceased and LPT falling due within three years following the death.

The deferred tax becomes payable  once the personal representative is in a position to transfer assets to the beneficiary or distribute the proceeds of sale.  The tax will in any event become due on the third anniversary of death. Irrespective of deferral.

Liability Date

The liability and valuation date for LPT is 1^st November in the year before.The interest rate and the rate of LPT is that generally applicable i.e.  8% daily rate of 0.219%.. This may be changed by order from time to time

This is the interest on deferred LPT.  Late LPT is subject to the standard rate of interest.  There is a deferral in respect of bankruptcy or significant hardship.  However an application must be made to the Revenue and the exemption must be granted.