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Property Taxation Application

Dáil Éireann Debate, Wednesday - 20 March 2013

Wednesday, 20 March 2013

Questions (229)

Brian Stanley

Question:

229. Deputy Brian Stanley asked the Minister for Finance noting that on properties sold to tenants under various State sales schemes a significant discount is applied to an agreed market value, thereby reducing the price paid by the tenant to the local authority and in view of the fact that the local authority does not receive market value on the sale of a housing property, his views on whether it is appropriate that market value be used when calculating the basic rate of local property tax. [12817/13]

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Written answers

I am informed by the Revenue Commissioners that the chargeable value is defined in the Finance (Local Property Tax) Act 2012 as the price that the unencumbered fee simple of a residential property might be expected to fetch on a sale on the open market were that property to be sold on the valuation date of 1 May 2013, in a manner that would secure the best possible price for the property. Therefore, in assessing the market value of a residential property it would be inappropriate that account be taken of whether the property was purchased by its current owner at a discount to market value, whether from a local authority or any other previous owner. The Local Property Tax (LPT) is a self-assessed tax, therefore 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. Certain Government backed schemes have been and continue to be available, aimed at helping lower-income households buy their own homes by allowing properties to be purchased at prices significantly less than their market value. I am advised by the Department of the Environment, Community and Local Government that under the Affordable Housing Scheme, launched in March 1999, local authorities provide additional housing on land, which they own, to low-income purchasers at cost price. A mortgage subsidy is payable to qualifying households based on income bands. The Shared Ownership Scheme facilitates access to home ownership in two or more stages for those who cannot afford home ownership immediately. In the case of qualifying households a subsidy towards the rent payments for that portion of the equity not yet purchased, based on income bands, is payable by the local authority, and recouped by the Department of the Environment, Community and Local Government. There are transitional arrangements for subsidy payments to avoid disincentives in the scheme as income rises.

To the extent that those who purchased a property under such schemes are on a low income, they may be in a position to qualify for either a full or a partial deferral of payment of Local Property Tax. The income thresholds for a full deferral are €15,000 for a single person and €25,000 for a couple. The thresholds for a partial deferral are €25,000 for a single person and €35,000 for a couple. These thresholds may be increased by up to 80% of mortgage interest payable – this increased threshold is available until 2017.

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