A Guide to Local Property Tax

Local Property Tax (LPT) applies to all residential property owners in Ireland, regardless of where they live. This covers primary or secondary residences, vacation homes, and rental properties.

Changes in LPT

Since 1 November 2021 Local Property Tax applies to new homes. This change comes about from changes introduced on the 22nd July 2021 in the Finance (Local Property Tax) (Amendment ) Act 2021 and implemented from the 1st November 2021.

Up to then, new homes were exempt from Local Property Tax (LPT) due to exemption in the original LPT tax introduced in 2013 which was at the low point of the market. Originally the exemption to LPT was to run to 2016 but it was extended till 2019. Then it was abolished altogether with effect from the 1st November 2021.

LPT changes and what it means to you from November 1, 2021, onwards;

Pre November 1 2021 the Developer transferred the house to you without having to register the house with Revenue under the LPT. From the 1st November 2021, all new homes must first be registered by the Developer and the LPT for the current Year paid. When the LPT is paid the Developer is issued with an LPT ID no and the transfer of the home to you can be completed. If the Developer has not registered and paid the LPT the home cannot transfer to you.

 

Will it cost you more?

It will cost you more either at the start or at the end of the first year. Some developers will insist on you paying them the LPT for the year starting November 1 but only from the date the home is built and transferred to you.

The amount you pay back to the Developer is apportioned so that you only pay them back for the period after you complete. This apportionment of the LPT back to the Developer will take place when you are closing your new home purchase and your solicitor will advise. You will be automatically registered for LPT from when you buy your new home post 1st November 2021 and Revenue will contact you to ensure payment.

 

What do you need to do?

You must take three actions in order to fulfill your LPT responsibilities for 2022:

  • Identify the property’s market worth as of November 1, 2021.
  • By 7 November 2021, send your LPT Return, together with your valuation.
  • Pay your LPT charge for 2022, or make preparations to do so.

Prior to the valuation date of November 1, 2021, Revenue will send you a letter (through MyAccount, Revenue Online Service (ROS), or the mail). You will also find your Property ID and PIN, which are also listed on any prior LPT communication you may have gotten from Revenue.

In addition to providing advice on filing your LPT Return and payment, the letter will certify that your online LPT record for 2022 is available.

Online submission of your LPT Return and payment of your LPT charge is the simplest method. You can access myAccount or Revenue Online Service with your current login information (ROS). You can also sign in directly to the LPT online service as an alternative. To log in, you will need your:

  • Property ID
  • Personal Public Service Number (PPSN) or Tax Reference Number.
  • PIN

Revenue will send you a hardcopy Form LPT1 – LPT Return together with a covering letter if you haven’t previously used the LPT online service.

Even if your property qualifies for an exemption, you must still include a claim for the exemption in your LPT Return and submit your valuation to Revenue.

Are there any exceptions?

  • Property in the event that the owner has been absent due to sickness or hospitalisation 
  • Property a charity holds and uses for events and other recreational ventures
  • Property that is already exposed to commercial rates
  • Nursing home properties
  • Property whose residences include a disabled persons 
  • Property on the Defective Concrete Blocks Grant Scheme or property with pyrite damage

 

Going forward

As your new home will be in the tax net for LPT you will be liable just like the owner of any residential property.  Here is a link to the current rates of LPT.

Dermot P Coyne