Property Taxes Explained

Written by David O’Dowd, and John Hiney 

  1. LOCAL PROPERTY TAX (“LPT”)

This is a tax paid by every household every year; it can be paid in monthly instalments or at the conclusion of each year. If you have not done so already we would advise that you contact the Revenue with regard to setting up an online LPT account. They will post a PIN out to you, which, along with your PPS number and Property ID will allow you to access your online account. Importantly, it is zero balance owing in each of the respective years that will need to be shown prior closing.

If your property is selling for an amount greater than the pricing band you have been paying in fear not, as there are a number of situations where “general clearance” now applies, meaning you do not have to get clearance from Revenue. These situations are as follows:

  1. If the property sells for less than €300,000.00 general clearance will apply.
  2. Allowable valuation margin: This is currently 50% of the upper limit of the band declared in Dublin, and 25% in all other counties. For example if you declared your Dublin property value between €250,001 and €300,000 general clearance will apply up to a sale price of €450,000 (i.e. 50% of €300,000).
  3. Expenditure on enhancements to the property: If a property sells for more than the allowable valuation, general clearance will apply if verified expenditure on enhancements can be shown. The purchase price minus the verified expenditure must give you a figure within the allowable valuation margin discussed at B).
  4. In the event that none of A-C apply there is another form of general clearance if you can show that one comparable property was sold in the declared band within the 9 months preceding May 2013 (this is when you would have declared your property’s value for LPT purposes). Properties are deemed to be comparable if they are in the same area, are the same type of property, are similar in size and are in a similar state of condition/repair.

 

  1. NPPR (“Non Principal Private Residence”)

This was essentially a Landlord’s Tax. Should the property in question have been any property other that your principal private residence (where you live usually), then you were liable to pay this tax. It should be noted that this tax is no longer in being however on closing you will need to show that this was paid for each of the relevant years, 2009 – 2013.

 

  1. HOUSEHOLD CHARGE

This was another annual charge that is now abolished and was payable by owners of residential property. This charge was abolished in 2013 and a €200 penalty added to the abovementioned LPT should and arrears be owed.