Dáil Éireann Debate, Tuesday - 30 April 2013
196. Deputy Brendan Griffin asked the Minister for Finance if he will clarify the position on local property tax liability for adjoining living quarters of rate paying businesses that have no saleable value; and if he will make a statement on the matter. [20161/13]
View answerBased on the information supplied by the Deputy it is not possible to give a definitive reply, however, by way of general information, the following may be of relevance in this case. Local Property Tax (LPT) is a self-assessed tax and is chargeable in respect of a building or a part of a building that is in use or that is suitable for use as a residence. However, it is not chargeable on the part of a building in respect of which commercial rates are payable. If the adjoining living quarters are not included for the purpose of commercial rates, the amount of LPT will be based on the “chargeable value” of the living quarters.
According to the Finance (Local Property Tax) Act 2012 (as amended) the chargeable value of a residential property is defined as the price that the unencumbered fee simple of the property or the residential part of a property, might be expected to fetch on a sale on the open market were the property to be sold on the valuation date in a particular year in a manner that would secure the best possible price for the property and with the benefit of any access to the property that would have existed prior to the sale. This type of hypothetical open market valuation applies to all types of residential property including residential property that is adjoined to or is contained within commercial property, where commercial rates are not payable on the residential element of the property. The open market value is based on a hypothetical sale; therefore it is not relevant that there may be difficulties in selling a property or that there may be a limited market for a particular type of property.
The owner of the business will be required to establish the chargeable value of the adjoining living quarters on 1 May 2013. If the chargeable value is less than €1m, the LPT liability will depend on the chargeable band into which this chargeable value falls. The rate of LPT on properties valued up to €1 million is 0.18%. As there is a banding system for properties the owner will not be required to provide a precise value for the adjoining living quarters if they are valued under €1 million. Properties valued over €1m are liable at 0.18% on the first €1 million in value and 0.25% on any balance over that amount.
