Local property tax valuation concerns are flagged to Revenue officials
Homeowners who buy or build over the next three years could end up paying higher LPT
Until the supply side increases, property prices are unlikely to fall
A slowdown in property price inflation means homeowners who buy or build a house over the next three years could end up paying a higher local property tax (LPT) than what their property justifies – because the Revenue Commissioners set the valuation date for LPT during last year’s frenzied property market.
Under the first overhaul of property tax in eight years, homeowners were asked to assess the value of their home – using both Revenue’s online valuation tool and market values – on November 1, 2021.
This determined the rate of property tax households would pay annually for four years. Until last year, property owners had been paying the tax based on valuations made in 2013, when the market was just starting to recover from a crash.
Patrick O’Rourke, an audit and tax partner at O’Kelly Sutton accountants, said a Revenue official on a recent webinar with tax advisers was “very clear” that anyone who buys a property in 2023 or 2024 will use November 2021 values when they start paying LPT.
All owners of habitable properties bought, occupied or built between November 1, 2021, and November 1, 2022, will be liable for LPT next year. This includes properties renovated during that time period that are now suitable to be lived in.
Bríd Heffernan from Chartered Accountants Ireland said: “If a person buys a house in 2023 and pays less than what it was valued at on November 1, 2021, it will still be the valuation used on November 1, 2021 that will determine the LPT charge for 2023, 2024 and 2025.
"It’s important to note that property prices might stabilise. Until the supply side increases, prices are unlikely to actually fall.”
Modelling by the Economic and Social Research Institute (ESRI) published earlier this month indicated that property prices are overvalued by at least 7pc.
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