{"id":22336,"date":"2023-07-22T15:29:00","date_gmt":"2023-07-22T15:29:00","guid":{"rendered":"https:\/\/legalblog.ie\/?p=22336"},"modified":"2024-01-18T21:45:47","modified_gmt":"2024-01-18T21:45:47","slug":"lpt","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/lpt\/","title":{"rendered":"LPT Charge"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/lpt\/#Residential_Property\" title=\"Residential Property\">Residential Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/lpt\/#Self-Assessment_Returns\" title=\"Self-Assessment &amp; Returns\">Self-Assessment &amp; Returns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/lpt\/#Liable_Persons\" title=\"Liable Persons\">Liable Persons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/lpt\/#Enforcement\" title=\"Enforcement\">Enforcement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/lpt\/#Valuation\" title=\"Valuation\">Valuation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/lpt\/#Payment\" title=\"Payment\">Payment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/lpt\/#Default_Provisions\" title=\"Default Provisions\">Default Provisions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/lpt\/#Revenue_Assessment_Valuation\" title=\"Revenue Assessment &amp; Valuation\">Revenue Assessment &amp; Valuation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/lpt\/#Sale_Issues\" title=\"Sale Issues\">Sale Issues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/lpt\/#Representatives_Liability\" title=\"Representatives Liability\">Representatives Liability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/lpt\/#Return_Issues\" title=\"Return Issues\">Return Issues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/lpt\/#Compliance_Issues\" title=\"Compliance Issues\">Compliance Issues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/lpt\/#Penalties_interest_and_surcharges\" title=\"Penalties, interest and surcharges\">Penalties, interest and surcharges<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Residential_Property\"><\/span>Residential Property<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Local Property Tax is an annual tax on the market value of residential property in Ireland.\u00a0 It was introduced in 2013 for the latter, six-months of the year.\u00a0 It applies from 2014 onwards for a full year.<\/p>\n<p>A residential property is any building or structure which is in use or suitable for use as a dwelling.\u00a0 It includes sheds, outhouses, garages and other building structures and yards enjoyed with the building.<\/p>\n<p>The 2021 Act substitutes the definition of \u201cresidential property\u201d .It restructures the existing definition of \u201cresidential property\u201d to make it clearer and provides that, in the case of properties exceeding an area of 0.4047 hectares (one acre), the part exceeding this area that is to be valued with the dwelling is the part that is most suitable for occupation and enjoyment with the dwelling.<\/p>\n<p>A \u2018residential property\u2019 means any building which is in use as, or is suitable for use as, a dwelling.\u00a0 A shed, outhouse, garage or other building which is appurtenant to or usually enjoyed with a residential property shall be considered, for the purposes of this Act, to form part of the residential property.<\/p>\n<p>Yards, gardens or other lands appurtenant to or usually enjoyed with a residential property as its garden or grounds are considered, for the purposes of this Act, to form part of the residential property.\u00a0 Where the total area of the yards, gardens and other lands,, exceeds 0.4047 hectares, only those parts of such yards, gardens and other lands, which would be the most suitable for occupation and enjoyment with the dwelling, up to a total area (exclusive of the area, at ground level, of the building of 0.4047 hectares, shall form part of the residential property.\u201d<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Self-Assessment_Returns\"><\/span>Self-Assessment &amp; Returns<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>LPT is a self-assessment tax.\u00a0 The onus is on each owner of property or other chargeable person to make the requisite return to the Revenue and satisfy the liability.<\/p>\n<p>The return filing date is in \u00a0November.\u00a0 There is an option for a return in paper form or online.\u00a0 Persons who own more than one residential property must file online.\u00a0 If a person is already obliged to file returns online, than their Local Property Tax return must be filed online.\u00a0 Corporates must \u00a0file online.<\/p>\n<p>A single return may be made for a property irrespective of how many owners.\u00a0 Revenue may assess and require returns from other owners.\u00a0 Each of the owners is jointly and severally liable for the tax.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Liable_Persons\"><\/span>Liable Persons<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The persons liable for Local Property Tax (LPT) include are as follows.<\/p>\n<ul>\n<li>The owners of residential property.<\/li>\n<li>A landlord where the property has been rented is rented for than 20 year.<\/li>\n<li>Lessees with an interest of 20 years or more.<\/li>\n<li>Trustees of property where they have a power to appoint.<\/li>\n<li>Personal representatives of the estate of a person who was previously liable.<\/li>\n<li>Local authorities or social housing organizations providing social housing. The values are deemed to be \u20ac100,000 until 2017.<\/li>\n<li>Persons with a life interest in residential property.<\/li>\n<li>Persons with rights of residence for life or 20 years or more that entitle them to exclude others from the property.<\/li>\n<li>Persons who occupy the property on a rent-free basis, without challenge or as of right.<\/li>\n<\/ul>\n<p>Where two or more persons are liable they are jointly and severally liable.\u00a0Where two persons are liable to register then registration by either fulfil the obligation of the other.<\/p>\n<p>Revenue may issue notices to persons liable by the return date.\u00a0 The issue of the notice is not a condition of liability nor does it remove the obligation to self-account for the tax.<\/p>\n<p>In the case of a corporate, the return must be undertaken by the Secretary.\u00a0 In the case of non-resident companies, this includes representatives and managers of the company within the State.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Enforcement\"><\/span>Enforcement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A person who is not liable is obliged to notify Revenue within 30 days of receiving the notice, given the basis for non-liability.\u00a0 The revenue may consider the application and make a determination.\u00a0 This may be appealed to the Appeal Commissioners.<\/p>\n<p>Where a person does not make the requisite returns and payment where obliged to do so, or enter the relevant arrangement, a 10% surcharge will apply.\u00a0 The Revenue may notify agents or managers of property or persons who collect rent requiring them to give statements of persons who are the owners or have the relevant interest in the property.\u00a0 Lessees and occupiers may be obliged to give details of the terms of their occupation and ownership and particulars of who is owner, lessor etc.<\/p>\n<p>The Revenue may serve the relevant notice if it has reasonable grounds for believing that the recipient has the requisite information.\u00a0 Failure to comply is subject to a penalty in the sum of \u20ac1000.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Valuation\"><\/span>Valuation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Persons must self-assess the value.\u00a0 Guidelines were issued for assessment of value in May 2013 which was taken as the valuation date for the following until 2017. (2020)<\/p>\n<p>Person selling property must disclose to the purchaser the chargeable value return.\u00a0 The purchaser may be obliged to submit a new return if the chargeable value declared was too low.<\/p>\n<p>Revenue guidelines refer to the age of the property, average price per house type in area.\u00a0 Revenue issued estimates based on its own assessment of price based on factors including the price register.\u00a0In the case of property on greater holding such as a farm, the house and area of land up to one acre is subject to the tax.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Payment\"><\/span>Payment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are a number of options for payment.\u00a0 Payment may be made by direct debit, cash payments in equal instalments through an approved service provider, deduction from salary or pension, deduction from the Department of Social Protection payments, deductions from Department of Agriculture payments.<\/p>\n<p>The payment method chosen in 2013 applies until an alternative is chosen.\u00a0 Where payment is by deduction from salary there is provision for notification to the employer and new employer.<\/p>\n<p>Deduction for salary is the default method where an individual does not specify a method of payment in the return or fails to make payment through a specified method.\u00a0 Employers must give details of the deductions at year end.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Default_Provisions\"><\/span>Default Provisions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Revenue may enforce collection through a number of methods.\u00a0 The Revenue may collect LPT, demand it through deductions, attachment of bank accounts, sheriff or debt collection, withholding of tax refunds, registration of a charge against property.\u00a0A Tax clearance certificate will not issue if a person fails to pay LPT.<\/p>\n<p>Interest at 8% applies to late payment plus penalties subject to a cap.\u00a0 There is no surcharge if the LPT return is filed and paid by the income tax date.\u00a0The LPT interest rate is linked directly to the interest rate provided for in Taxes Consolidation Act 1997 by the 2021 Act so that any future changes to this rate will automatically apply to LPT without the need for a separate legislative amendment for LPT.<\/p>\n<p>The 2011 household charges converted into a charge of \u20ac200 and is deemed LPT.\u00a0 NPPR does not apply in 2014 and subsequent years.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Revenue_Assessment_Valuation\"><\/span>Revenue Assessment &amp; Valuation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Revenue may make an estimate of an amount of LPT in relation to a liability date. Revenue has sent an estimated tax liability to property owners in 2013 notwithstanding that it is a self-assessment tax.<\/p>\n<p>They continued to do so in later years provided certain options were taken.\u00a0 Revenue have assessed their valuations on a number of factors.<\/p>\n<p>Taxpayers may seek an alternative valuation from a professional valuer.\u00a0 Revenue reserve the right to review a formal valuation.<\/p>\n<p>A person who has occupied a property on a rent-free basis without challenge and has a right to register title on the basis of adverse possession is accordingly subject to the tax.\u00a0 In broad terms, the onus is on the owner to disprove ownership if it arises as an issue.<\/p>\n<p>In the absence of proof of title, it is presumed that the person in occupation is the liable person.\u00a0 This applies also to receipt of rents and profits.\u00a0 Revenue do not investigate title but reserve the right to do so.<\/p>\n<p>The Revenue may correct the Revenue Register on application or as issues arise.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Sale_Issues\"><\/span>Sale Issues<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>LPT is a charge on the property.\u00a0 This means that it can be enforced against the property by sale.\u00a0 In practice, the LPT needs to be discharged on the sale of the property or the buyer will not obtain unencumbered, good title.\u00a0 LPT proof of compliance is needed on sale.<\/p>\n<p>There is an obligation on a purchaser to file an additional return if he has reason to believe the value in the seller&#8217;s return is not reasonable. LPT remains a charge on the property without time limit.\u00a0 The Statute of Limitations is specifically varied in this regard.<\/p>\n<p>Where a property is sold, the seller must provide details of the chargeable value and a copy of the return.\u00a0 A penalty of \u20ac500 is payable on breach of this obligation.<\/p>\n<p>The new owner must make a return if he\/ she believe that the chargeable value returned is not a value that could reasonably have been relied on.\u00a0 A \u20ac3,000 penalty may arise for failure to file.<\/p>\n<p>The LPT must be paid on sale if the property is sold within two months of the liability date.\u00a0 In practice the fact that it is a charge on the property will mean that it would be required to be discharged.\u00a0 The seller may require to recoup part of the prepayment under an apportionment.<\/p>\n<p>The Law Society has taken the view that the standard apportionment clauses in the contract are insufficient for this purpose so that in a clause may be provided obliging the purchaser\/buyer to repay prepaid LPT.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Representatives_Liability\"><\/span>Representatives Liability<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A trustee is liable for Local Property Tax if the trustee or beneficiary is entitled to possession of a residential property.\u00a0 In some cases both the trustee and beneficiary of the trust (who may hold it for example, for a life estate) may be jointly liable.\u00a0 A person with power to appoint maybe liable to Local Property Tax.<\/p>\n<p>Only one return is required per property even if several persons are liable.\u00a0 In effect there is an onus on persons to agree liability and pay the tax.\u00a0 If none does so, the Revenue may \u00a0collect and enforce against any of the \u00a0persons liable.<\/p>\n<p>Personal representatives of a deceased estate are liable.\u00a0 \u00a0There is a 12 month grace period for an intestate estate or where the executor predeceased the deceased.\u00a0 After this has expired, persons in occupation or in receipt of rents are liable to the tax even before the grant of representation issues.<\/p>\n<p>Accordingly, a caretaker may be liable once this twelve-month period has expired.\u00a0 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.<\/p>\n<p>The deferred tax becomes payable \u00a0once the personal representative is in a position to transfer assets to the beneficiary or distribute the proceeds of sale.\u00a0 The tax will in any event become due on the third anniversary of death irrespective of deferral.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Return_Issues\"><\/span>Return Issues<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The liability and valuation date for LPT is 1<sup>st<\/sup> November in the year before.The interest rate and the rate of LPT is that generally applicable i.e.\u00a0 8% daily rate of 0.219%.. This may be changed by order from time to time<\/p>\n<p>The 2021 Act requires for \u00a0collection of certain information about the occupation of properties on a valuation date: the use of a property as a person\u2019s principal residence, whether the property is occupied and if the property is not occupied, the period during which it has not been occupied and the reason for this. The information to be collected is restricted to its use in the compilation of statistical information.<\/p>\n<p>Liable persons who are eligible for one of the exemptions specified must claim the particular exemption on a return. \u00a0Revenue may make a determination that an exemption does not apply. Revenue must notify the liable person of its determination and the liable person then has a right of appeal against the determination to the Appeal Commissioners.<\/p>\n<p>There is a right of appeal to the Appeal Commissioners against a Revenue specification that a person is the designated liable person in relation to a property for which there is more than one liable person.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Compliance_Issues\"><\/span>Compliance Issues<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This is the interest on deferred LPT.\u00a0 Late LPT is subject to the standard rate of interest.\u00a0 There is a deferral in respect of bankruptcy or significant hardship.\u00a0 However an application must be made to the Revenue and the exemption must be granted.<\/p>\n<p>A person who files LPT late may be subject to an income tax surcharge under his general tax returns obligations.\u00a0 He is deemed not to have filed his income tax obligations on time if the LPT return is outstanding, so that the surcharge will apply.\u00a0 However it is capped at the amount of the LPT.\u00a0 The LPT surcharge is capped at the amount of LPT liability.<\/p>\n<p>Additional compliance provisions apply.\u00a0\u00a0A tax clearance certificate will not be available to self-employed taxpayers who have not complied with their obligations.\u00a0 Deduction at source applies if no election is made for method of payment.<\/p>\n<p>The NPPR charge and household charge remain a charge on property for 12 years.\u00a0 There is no time limit for LPT.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Penalties_interest_and_surcharges\"><\/span>Penalties, interest and surcharges<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The maximum penalty is \u20ac3000 for failure to make return.\u00a0 Where an employer fails to comply with requirements, the employer may be subject to a penalty of up to \u20ac3,000.<\/p>\n<p>If the employer fails to deliver an annual statement of the LPT deducted he is liable for a penalty of \u20ac500 per month that the return remains outstanding up to a maximum of \u20ac3,000.\u00a0 The Secretary is potentially liable to a separate penalty of \u20ac2000 in the case of a body corporate.<\/p>\n<p>Both interest and surcharge may apply.\u00a0 The surcharge is up to a maximum of 100% liability.<\/p>\n<p>Where a taxpayer fails to make the return, he may be subject to a surcharge on his income for up to 10%.\u00a0 However, if this is less than the LPT, it is capped at the amount of the LPT concerned.\u00a0 Accordingly if 10% of his income is less than the LPT charged then he may be subject to a surcharge for the shortfall.<\/p>\n<p>There are provisiosn for \u00a0appeals against Revenue assessments. A person who is non-compliant in relation to the LPT requirements to deliver a return and pay LPT is liable to a surcharge of 10 percent of the amount of tax contained in an income tax or corporation tax assessment where the person is also chargeable to those taxes.<\/p>\n<p>Finance Act 2020 provides for \u2018debt warehousing\u2019 for income tax and universal social charge liabilities deducted by employers from their employees\u2019 salaries. The amendment includes LPT deducted from salaries in these \u2018debt warehousing\u2019 provisions.<\/p>\n<p>A liable person must be in compliance with his or her LPT obligations to obtain a tax clearance certificate. However, as the tax clearance provisions for certain public appointees are instead contained in the Standards in Public Office Act 2001, this Act is now being amended to include the requirement for LPT compliance.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-22336\" data-postid=\"22336\" class=\"themify_builder_content themify_builder_content-22336 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Residential Property Local Property Tax is an annual tax on the market value of residential property in Ireland.\u00a0 It was introduced in 2013 for the latter, six-months of the year.\u00a0 It applies from 2014 onwards for a full year. A residential property is any building or structure which is in use or suitable for use [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[111],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/22336"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=22336"}],"version-history":[{"count":18,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/22336\/revisions"}],"predecessor-version":[{"id":30777,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/22336\/revisions\/30777"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=22336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=22336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=22336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}