Section 38 of the Finance (Local Property Tax Act) 2012 (as amended) provides that property owners who fail to meet their LPT obligations will be surcharged when filing an Income Tax (IT), Corporation Tax (CT) or Capital Gains Tax (CGT) return.
The surcharge is set at 10% of the IT, CT, or CGT liability to a maximum of €63,485 and is in addition to the actual LPT liability plus any interest arising on foot of late payment. The surcharge is imposed from the date the IT, CT or CGT return is filed. Under certain conditions the surcharge can be reduced to equal the outstanding LPT liability. These conditions include situations where the surcharge is higher than the outstanding LPT liability, where the property owner files the LPT return or pays the outstanding liability either in full or on a phased basis.
Revenue has advised me that during 2017 it imposed almost 9,800 surcharges on foot of LPT non-compliance. The total value of the surcharges raised amounted to €3.7 million but almost 70% of this amount was mitigated following remedial action by the property owners. The remaining yield is attributed to IT, CT or CGT as appropriate and is not included in the LPT receipts.
Part 12 of the LPT Act provides for a deferral or partial deferral (50%) of LPT in certain circumstances. These circumstances include ‘Income Level’, ‘Hardship’, ‘Personal Insolvency’ and ‘Personal Representative of a Deceased Person’. Once granted, a deferral normally remains in place for the duration of the ‘valuation period’, which is currently 1 May 2013 to 31 October 2019. However property owners can opt to pay the outstanding liability at any time and discontinue with the deferral. Where a deferral is in place, the outstanding liability remains as a charge on the property and must be paid before a sale or transfer can be completed. Interest is charged on the deferred amount at a rate of 4% per annum.
Revenue has advised me that there are currently in excess of 62,000 properties with deferrals in place for one or more years. In 2017, payment was received in respect of 6,300 properties with deferrals in place amounting to €4 million. This represented 0.8% of the total LPT receipts for the year (€477 million).
