The 2021 Act provides that where a local authority or approved housing body leases a residential property from the owner of the property for a period of at least 20 years, then it is the owner/lessor of that property and not the local authority or approved housing body, as would otherwise be the case, who is the liable person in relation to that property.
A person, who does not consider himself or herself to be a liable person, can apply for a Revenue determination on the matter of liability. There is a right of appeal against Revenue’s refusal of a claim for exemption.
Liable persons are relieved of the obligation to deliver a return every year where they have delivered a return in respect of the first liability date in a valuation period, which return includes a self-assessment and where LPT is being paid in accordance with the selected payment method. The same LPT liability is to be payable each year in a valuation period and for the same payment method to be used.
The 2021 Act requires a person who purchases a property from a local authority to deliver a return following the change of ownership.
The 2021 Act amends the surcharge for the late submission of income tax and corporation tax returns. Currently, the surcharge is capped at the amount of a person’s LPT liability where that person becomes LPT-compliant after the surcharge has been imposed. The amendment reduces the cap to 50 percent of the LPT liability.
Properties in respect of which a local authority or an approved housing body is the liable person are deemed to be in band 1, irrespective of the market value of those properties.
The liability date for each year is 1 November in the preceding year. The valuation date which fixes the valuation is 1 May 2013 in respect of each of the years 2013 to 2016 inclusive. The Finance (Local Property Tax) (Amendment) Act 2015 made a number of amendments to local property tax. It postponed the revaluation date from 1 November 2016 to 1 November 2019. This was further extended .
Where a return is submitted in relation to the first liability date and valuation period, a liable person is not required to submit another return until the first liability date in the following valuation period unless the circumstance has changed. In effect, the extended period rans up to the next valuation date of 2019.
The Finance (Local Property Tax) (Amendment) Act 2021 provides for:
- a revaluation of residential properties on 1 November 2021,
- the bringing of certain previously exempted and excluded properties within the scope of LPT,
- the ongoing bringing of new properties within the scope of LPT, and
- a revised method for calculating LPT liabilities.
Where properties are less than €1 million in value, a person who makes a self-assessment return in accordance with the valuation guidelines and which is filed on time, then the Revenue will not seek to make an assessment displacing the valuation. Estimated valuations were given for this purpose.
The “valuation period” is the range of years for which a particular valuation date applies. It specifies
- 1 May 2013 for the years 2013 to 2021,
- 1 November 2021 for the years 2022 to 2025, and for each consecutive 4-year period after the year 2025, 1 November in the year preceding the first year of the particular 4-year period.”
In the case of valuation of properties which were not “residential properties” on the preceding valuation date (due to the fact that their construction, or refurbishment to a habitable condition, had not been completed), but which become residential properties after that date, are to be valued at the notional value that would have applied at the preceding valuation date had the property been a residential property on that date.
There is unchanged valuation where a property is transferred to another liable person during a valuation period. The 2021 Act disapplies this treatment where a property is sold by a local authority or an approved housing body. In such cases the band 1 valuation that applies to all properties owned by a local authority or social housing body will no longer apply and a purchaser of such a property will have to pay LPT based on the actual value of the property which may not be in band 1.
The 2021 Act deletes the provision which commits Revenue to accepting all self-assessments in respect of properties valued at under €1 million that were valued in accordance with published Revenue guidance. Future LPT self-assessments are subject to the usual Revenue compliance regime that applies to other self-assessed taxes.
The 2021 Act provides for a revised charging methodology involving wider value bands and three rates of LPT instead of two rates. Band 1 is widened from €1 to €200,000 and band 2 now contains values between €200,000 and €262,500. Fixed LPT charges are introduced for bands 1 and 2 of €90 and €225, respectively. A 75 per cent increase in band width is applied to the remaining bands 3 to19.
The calculation of LPT for bands 3 to 11 is to be determined by charging the mid-point of the band at the rate of 0.1029 percent. For properties in bands 12 to 19, that part of the mid-point value which is below €1,050,000 is charged at the rate of 0.1029 percent and that part of the mid-point value which is above €1,050,000 is charged at the higher rate of 0.25 percent, with both amounts aggregated to determine the LPT liability.
For properties valued at over €1,750,000, that part of the value below €1,050,000 is charged at the rate of 0.1029 percent, that part of the value between €1,050,000 and €1,750,000 is charged at the rate of 0.25 percent and that part of the value exceeding €1,750,000 is charged at the rate of 0.3 percent, with the three amounts aggregated to determine the LPT liability.
- Where a relevant residential property falls into band 1, the amount of the local property tax to be charged in respect of the chargeable value of that property shall be €90.
- Where a relevant residential property falls into band 2, the amount of the local property tax to be charged in respect of the chargeable value of that property shall be €225.
- Where a relevant residential property falls into any of the bands 3 to 11, the amount of the local property tax to be charged in respect of the chargeable value of that property shall be the amount represented by A in the formula—A=B*C where
B is the mid-point, specified in column (3) of the Table to this section opposite the valuation band specified in column (2) of that Table into which the chargeable value (rounded down to the nearest euro) of the property falls, and C is 0.001029.
- Where a relevant residential property falls into any of the bands 12 to 19, the amount of the local property tax to be charged in respect of the chargeable value of that property shall be the amount represented by A in the formula—A=(B*C)+[(D-B)*E] where B is €1,050,000, C is 0.001029, D is the mid-point, specified in column (3) of the Table to this section opposite the valuation band specified in column (2) of that Table into which the chargeable value (rounded down to the nearest euro) of the property falls, and E is 0.0025.
- Where the chargeable value of a relevant residential property exceeds €1,750,000, the amount of the local property tax to be charged in respect of the chargeable value of that property shall be the amount represented by A in the formula—A=(B*C)+[(D-B)*E]+(F*G) where B is €1,050,000, C is 0.001029, D is €1,750,000, E is 0.0025, F is that part of the chargeable value of the property that exceeds €1,750,000, andG is 0.003.
The 2021 Act makes new arrangements for appeals relating to the valuation of properties. Such appeals will now be decided by a specialist body called the Land Values Reference Committee instead of by the Appeal Commissioners. Appeals against LPT assessments relating to non-valuation disputes will continue to be decided by the Appeal Commissioners.
The liability for tax is based on the midpoint of the relevant band in which the property falls. €0 to €100,000 is the first band. The bands increase in increments of €50,000 above €100,000. The tax is calculated on the midpoint of the band.
The general rate is 0.18% on the first €1 million in value. In the case of properties valued over this amount 0.25% of the value is taxed. The valuation in respect of 2013 was 50% of the normal rate. Strictly speaking this was the tax referred to the annual period although it was charged at 50%.
Local authorities may adjust the percentage upwards or downwards by 15% of the relevant rate. The Minister may make regulations in relation to the consultation process involved in adjustment. They must do so before 30th September in the relevant year and notify the Revenue. Although the tax is intended to be for the benefit of local authorities, it is under the care and management of the Revenue Commissioners.
The 2021 Act provides for the adjustment that local authorities may make each year to the standard rate(s) of LPT. Such adjustment of rates continue and, for this purpose. It takes account of the three new rates of LPT and the fixed LPT charge in bands 1 and 2.
Local authorities must notify Revenue of the adjusted rates of LPT. Instead of 30 September in each year, the notification date will be 31 August in a year in which there is a valuation date and 15 October in any other year.
An application for a reclaim may be made in respect of the tax within four years from the date of liability. A complete return must be given with the requisite information and basis for the reclaim must be submitted. A person who disagrees with the decision of Revenue may appeal to the Appeal Commissioners.
The Revenue Commissioners maintain a register of properties for the purpose of the tax. Each is assigned a unique ID number. Persons are liable to register in the first instance.
Revenue compile the register or reference to various sources including tax numbers, NPPR details, PRTB details and utility providers record. Revenue notified the relevant persons. However those who were not notified or given particulars were obliged to register.