I thank the Deputy for raising this important issue. The legislation governing the local property tax is contained in the Finance (Local Property Tax) Act 2012 which was signed into law by the President on 26 December 2012. The legislation sets out in detail how the tax is to be administered and provides how a residential property is to be valued for local property tax purposes, including where there is a change in ownership of the property. The Act provides for a number of specific exemptions from the charge, in addition to the possibility of deferring the charge in certain cases of hardship.
The Revenue Commissioners are compiling a local property tax register which is being drawn from a range of sources, including the LGMA database, its own databases and data from utility companies. Data from the various sources are being cross-checked to ensure the register is as accurate as possible. The register will be used to correspond with property owners.
In common with many other taxes, the local property tax is a self-assessment tax. Thus, in the first instance, it is a matter for the property owner to calculate the tax due based on his or her assessment of the chargeable value of the property. Beginning in March 2013, the Revenue Commissioners will be issuing a local property tax return to all property owners, together with an information booklet. The general issue of returns will also include a Revenue estimate of the local property tax. This Revenue estimate which is provided for in the Finance (Local Property Tax) Act 2012 is not a property valuation but an amount of tax which will be collected in the event that the liable person does not submit a return. Property owners will have the option of completing and submitting their local property tax return on paper or by electronic means. I am advised that the development of the paper local property tax return form and an online system for completing and submitting local property tax returns is well advanced.
The Revenue Commissioners will not be valuing properties for local property tax purposes, except where there is a dispute about a valuation provided by a taxpayer which, because of the banding system, is expected to arise only in a minority of cases. Revenue is, however, actively preparing valuation guidance and developing tools to assist liable persons in assessing the value of their property. These will be made available as soon as possible. Where these guidelines are used honestly, the property valuation will not be challenged by Revenue in accordance with its normal customer service charter. The guidelines will include drawing property owners' attention to the publicly available PSRA property price register which includes some 62,000 reasonably recent property prices and a method to help property owners establish average-indicative values for properties in different locations.
A range of data sources is being analysed to assist in providing this valuation guidance. They include Revenue's stamp duty records which record all property sales in the Republic and the values of the properties sold. These records provide an important benchmark that indicates average property values across the country. Analysis shows these values are in line with price indices produced by the Central Statistics Office and similar measures published by the real estate sector. Revenue is also examining accessing other sources of recent property valuations data which will complement and enhance the stamp duty data.
Data sources in addition to stamp duty records and other valuation data include the GeoDirectory produced by Ordinance Survey Ireland and An Post which provides information on property location and type; spatially derived data that indicate relative distances of all residential properties — using GeoDirectory — from a series of key amenities and services, including transport, health, education, retail and emergency services.
Revenue is also geographically linking its data with publicly available sources such as the CSO's 2011 census results at small area level and the 2011 Pobal HP Deprivation Index. The output of this work will be to give indicative or average values for properties in different locations across the country. The average values will be provided by property type, to distinguish separate values for detached, semi-detached, terraced and other types of houses. Other features include, for example, the ability to distinguish between values for new and old properties.
The Revenue valuation guidance tools will be available on the Revenue website as soon as possible but certainly in good time before the general issue of local property tax returns in order to allow property owners to examine and compare these indicative average values in their area. The Property Services Registration Authority property register, to which I referred, is already available for consultation in regard to property sale prices in recent years.
The approach of the Revenue Commissioners to producing valuation guidance is based on international best practice methods in this field. The methods being applied are widely used and accepted in real estate valuation and property tax administration in many countries. Similar methods to estimate average valuations have been used in Ireland, for example, by the Central Statistics Office when estimating the residential property price index and in research by authors from the Economic and Social Research Institute.
The Revenue guidance will provide average values for an area. These averages will be indicative of the correct property value band in the majority of cases but will not be correct for every property in every area. The approach used by Revenue meets international standards for property valuation, but no method can comprehensively and accurately value every property in the country. Comparisons with properties recently listed for sale show that valuations provided are in line with current market transactions.
The Revenue valuation guidance is intended to assist property owners, but each owner will need to consider the specifics of his or her property, the area and any other local factors that influence the value when making his or her valuation assessment. As I noted, the local property tax is a self-assessment tax and the Revenue valuation guidance will be provided to assist property owners in determining a value for their property. Each property owner will need to consider his or her area, his or her knowledge of properties therein and any other relevant factors in determining for himself or herself whether the Revenue guidance offers a reasonable indication of the value of his or her property. If the property owner approaches the matter honestly, Revenue will accept self-assessed valuations in accordance with the customer service charter.