The new LPT legislation brings properties under the focus of LPT that may have previously been exempt or excluded. Moving forward, property valuations will be reviewed every four years, which was previously intended to be three years.
Old vs New
Although the Department of Finance expects the new valuation rates to yield €560m, the expected financial effect on homeowners should be minimal.
The Department of Finance expects that 53% of taxpayers should not experience any change in their LPT liability, that 33% will experience an increase of up to €100 and 3% of taxpayers will experience an increase in their LPT liability of over €100. It is also expected that 11% of taxpayers should see a decrease in their LPT liability.
Below we have compiled a table outlining the current rate bands and associated charges compared to the new bands and associated charges. The number of valuation bands remains at 20, although the valuation range of each band will be amended as below:
| Previous Band Structure |
| Updated Band Structure | ||
| Band | Charge |
| Band | Charge |
1 | 0 – 100,000 | 90 |
| 1 – 200,000 | 90 |
2 | 100,001 – 150,000 | 225 |
| 200,000 – 262,500 | 225 |
3 | 150,001 – 200,000 | 315 |
| 262,501 – 350,000 | 315 |
4 | 200,001 – 250,000 | 405 |
| 350,001 – 437,500 | 405 |
5 | 250,001 – 300,000 | 495 |
| 437,501 – 525,000 | 495 |
6 | 300,000 – 350,000 | 585 |
| 525,001 – 612,500 | 585 |
7 | 350,001 – 400,000 | 675 |
| 612,501 – 700,000 | 675 |
8 | 400,001 – 450,000 | 765 |
| 700,001 – 787,500 | 765 |
9 | 450,001 – 500,000 | 855 |
| 787,501 – 875,000 | 855 |
10 | 500,001 – 550,000 | 945 |
| 875,001 – 962,500 | 945 |
11 | 550,001 – 600,000 | 1,035 |
| 962,501 – 1,050,000 | 1,035 |
12 | 600,001 – 650,000 | 1,125 |
| 1,050,001 – 1,137,500 | 1,193 |
13 | 650,001 – 700,000 | 1,215 |
| 1,137,501 – 1,225,000 | 1,409 |
14 | 700,001 – 750,000 | 1,305 |
| 1,225,001 – 1,312,500 | 1,627 |
15 | 750,001 – 800,000 | 1,395 |
| 1,312,501 – 1,400,000 | 1,846 |
16 | 800,001 – 850,000 | 1,485 |
| 1,400,001 – 1,487,500 | 2,065 |
17 | 851,000 – 900,000 | 1,575 |
| 1,487,501 – 1,575,000 | 2,284 |
18 | 900,001 – 950,000 | 1,665 |
| 1,575,001 – 1,662,500 | 2,502 |
19 | 950,001 – 1,000,000 | 1,775 |
| 1,662,501 – 1,750,000 | 2,721 |
20 | Over €1m |
|
| 1,750,000+ | 2,830+ |
Properties falling into band 20 are charged as before, depending on individual property values, 0.1029% on the first €1.05m, 0.25% between €1.05m and €1.75m and 0.3% on the balance.
What you need to do
The next property valuation date for LPT purposes is 1 November 2021. The valuation of the property at this date will apply for the four year period 2022 to 2025. The valuation of your property is to be conducted on a self-assessed basis, meaning it is up to the taxpayer to submit a valuation of their property. Revenue guidance advises a range of resources which can be used to determine a valuation of your property, such as Revenue's Interactive Valuation Tool, the Residential Property Price Register or a professional valuation.
Revenue will issue taxpayers with a letter ( through MyAccount, ROS or the post ) containing your property ID and PIN in advance of the valuation date of 1 November 2021. Once the market value of your property has been determined, your LPT Return should be submitted by 7 November 2021. Your LPT Return can be submitted through one of the three following options, depending on what is relevant to you; your Revenue myAccount, Revenue Online Service (ROS) or directly on the LPT online service. It is important to note that if you have previously paid LPT, your current payment method will be automatically carried forward to 2022 unless modified when submitting your LPT return.
New to LPT
As mentioned previously, it may be the case that you find yourself liable to LPT for the first time. This is because there have been significant changes introduced with respect to exemptions available. Homes constructed by the new valuation date of 1 November 2021 will come within the charge to LPT, and various exemptions previously available to taxpayers will lapse, such as the exemption for first-time buyers who purchased their property during 2013. Previously, properties vacated by their owner due to illness would gain an exemption from LPT on the condition that the property remained vacant. The new Act removes this condition with the intention of freeing up homes for the rental market.
The Act also amends the definition of "residential property" for LPT purposes to bring sheds, garages, gardens and other lands (up to 1 acre) which are suitable and usually enjoyed with the residential property, for the purposes of LPT, to form part of the residential property.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars private client team below:
Position | Telephone | ||
Alan Murray | Tax Partner | 01 449 6480 | |
Siobhán O’Moore | Senior Tax Manager | 01 449 6418 |
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