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Property Taxation Application

Dáil Éireann Debate, Thursday - 28 March 2013

Thursday, 28 March 2013

Questions (89)

Bernard Durkan

Question:

89. Deputy Bernard J. Durkan asked the Minister for Finance the procedure to be followed by residents of local authority shared ownership mortgages in respect of the local property tax; if the local authority as co-owner of the property is liable for part of the tax; and if he will make a statement on the matter. [15924/13]

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Written answers

The Finance (Local Property Tax) Act 2012 (as amended) sets out how the tax is to be administered and provides that a liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date which will be 1 May 2013 for the year 2013 and, for subsequent years 1 November in the preceding year. Section 7 of the 2012 Act provides that local authorities will be liable to pay the LPT on their properties in the same way as any other residential property owner, unless the properties in question are used to accommodate people with special housing needs such as the elderly or people with disabilities.

I am advised by the Revenue Commissioners, however, that residential properties purchased under the various local authority shared ownership schemes will also be subject to LPT and that the liable person in these instances will be the purchaser. This is on the basis that under these schemes, the purchaser acquires a leasehold interest in the property for a period that exceeds 20 years. Such a purchaser is in the same position as a property owner who purchases a residential property with a mortgage from a financial institution. Accordingly, there is no reason why such an individual should not be liable for payment of the LPT on the property.

As in the case of any other liable person, the LPT is based on the “chargeable value” of the property, which is the price which the unencumbered fee simple of the property might reasonably be expected to fetch on a sale in the open market were that property to be sold on the valuation date in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the property.

I am informed by the Commissioners that LPT is a self-assessed tax. In the context of the question put by the Deputy, it is a matter for the person who is purchasing a local authority shared ownership residential property to calculate the tax due based on his or her assessment of the chargeable value of the property and to make a Return to Revenue. As part of the general issue of LPT Returns which commenced on 11th March 2013, liable persons will also receive a Guide to Local Property Tax, which provides detailed guidance on completing the Return.

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