Dáil Éireann Debate, Wednesday - 15 February 2023
68. Deputy Maurice Quinlivan asked the Minister for Finance if those suffering from dementia and Alzheimer’s disease who are late paying their local property tax will be required to pay the 8% per day interest fee; and if he will make a statement on the matter. [7642/23]
View answerLocal Property Tax (LPT), in common with all other taxes and duties, must have a robust but reasonable set of sanctions open to Revenue to apply in appropriate cases. Section 1080 of the 1997 Taxes Consolidation Act provides for the charging of interest on the late payment of Income Tax. The current rate applied to such late payments is 8% per annum (0.0219% per day). This rate also applies to LPT.
These statutory charges, which Revenue is obliged to apply, are designed to compensate the Exchequer for the late payment of monies due and to maintain a level playing field for the vast majority of taxpayers and businesses that meet their tax obligations in full and on time. The application of interest charges to the late payment of tax is well established as a core strategy for ensuring timely compliance. The onus is on all taxpayers and businesses, assisted by their agents or tax practitioners, to organise their financial affairs to ensure that tax debts are paid as they fall due thereby avoiding interest charges.
However, while Revenue is obliged to collect all tax and interest liabilities as they fall due, it is acknowledged that there will be cases where normally compliant taxpayers experience difficulties, as a result of ill health or other issues, that result in a failure to meet their tax obligations at all or on time. In such scenarios, Revenue is committed to working with any taxpayer who experiences such difficulties. Revenue’s long standing approach is to make it as easy as possible for people to comply with their obligations. Revenue facilitates a number of different payment options by which a taxpayer can discharge their liability to LPT through a single payment or in a weekly or monthly phased payment arrangement. The full range of payment options, which include phased arrangements, are available to property owners via the LPT portal on the Revenue website at https://www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx
While the legislation does not provide a specific exemption from LPT for persons who are suffering from dementia or Alzheimer’s disease, Section 5 of the Finance (Local Property Tax) Act 2012 (as amended) provides for an exemption from LPT where a person is unable to continue living in their sole or main residence as a result of a mental or physical infirmity which has been certified by a medical practitioner.
Finally, it is possible for persons who are struggling to pay an LPT liability to qualify for a full or partial deferral of their liability on a property in which they live if their income is below a certain limit. The income thresholds were increased in 2022 and are now €18,000 for a single person and €30,000 for a couple to qualify for a full deferral. The income limits to qualify for a partial deferral are €30,000 for a single person and €42,000 for a couple. It is also possible to apply for a deferral on the grounds of hardship if a person suffers an unexpected and unavoidable significant loss or expense as a result of which a person cannot pay their LPT liability without suffering financial hardship. This category applies to persons who do not qualify for a deferral based on their income. The type of loss or expense that would be considered under this category includes a sudden medical expense.
Any person wishing to avail of a deferral must make an application in writing to Revenue.
A deferral is not an exemption or a ‘write off’ of any outstanding liability. The liability still remains due. Interest at a rate of 3% applies on all outstanding deferred liabilities from 1 January 2022. Up to 31 December 2021, the rate was 4%. Where a deferral is in place, the outstanding liability automatically attaches as a charge on the property and must be paid before a sale or transfer can be completed.
Further information on applying for a deferral of LPT is available from the Revenue website at: www.revenue.ie/en/property/local-property-tax/deferral-of-payment/index.aspx.
