I am advised by the Revenue Commissioners that while there is no specific exemption from Local Property Tax (LPT) for a person with a disability, a residential property occupied by an individual who is disabled may qualify for a reduction in the market value of the property for LPT purposes. In instances where a residential property is occupied by an individual who is permanently and totally incapacitated, the property may be exempt from LPT. These two LPT reliefs are outlined below.
Section 15A of the Finance (Local Property Tax) Act 2012 (as amended) provides for a reduction in the market value for LPT purposes of a residential property that has been adapted for occupation by a disabled person where the adaptation has been grant-aided, or approved for grant aid, by a local authority and where the adaptation increases the market value of the property. The person with the disability must occupy the property as his or her sole or main residence after the adaptation is completed. Under the Disability Act 2005 disability means "a substantial restriction in the capacity of an individual to carry on a profession, business or occupation in the State or to participate in social or cultural life in the State by reason of an enduring physical, sensory, mental health or intellectual impairment."
Section 10B of the LPT Act provides that an exemption from the charge to LPT may apply to a residential property purchased, built or adapted to make it suitable for occupation by a permanently and totally incapacitated individual as their sole or main residence, where an award has been made by the Injuries Board (formerly known as the Personal Injuries Assessment Board) or a court, or where a trust has been established, specifically for the benefit of such individuals. In the case of adaptations to a property, the exemption only applies where the cost of the adaptation work exceeds 25% of the market value of the property before it was adapted.
Entitlement to the exemption provided for in section 10B depends on whether the extent of a person's disability is such that they are permanently and totally incapacitated from being able to maintain themselves. "Maintain" in this context means a person's ability to support themselves by earning an income from working. Total incapacity in this context means that the individual is not capable of earning a living from any kind of work. The incapacity must also be permanent, that is, there must be no prospect of the individual recovering, or of the condition improving, to the extent that they become capable of maintaining themselves.
Following representations and a review of the reliefs by Revenue, I announced on 2 May that I intend bringing forward legislation amending section 15A to remove the requirement that any adaptation work on the residential property must be grant-aided, or has been approved for grant-aid, by a local authority as one of the qualifying conditions for the tax relief. I also intend to remove the requirement, by way of legislation amending section 10B, that a permanent and totally incapacitated person must have benefitted from a Court or Injuries Board award or a public trust fund, to qualify for the exemption.
My officials wrote to the Chairman of the Revenue Commissioners advising her of my intention to amend the legislation with retrospective effect. In view of this, the Chairman has advised me that Revenue will apply the exemption and the tax relief in line with the proposed revised legislation. The Commissioners have recently published detailed guidelines which describe how a residential property qualifies for the reduction in market value or the exemption under the new arrangements, and how liable persons should make their application to Revenue. The Guidelines are available on their website at: http://www.revenue.ie/en/tax/lpt/extension-reliefs-disabled-incapacitated.html. I am informed that Revenue will examine each application and may seek additional information if considered necessary before determining whether the person is entitled to a reduction in the market value of the property or to the exemption, whichever one is being claimed.
The Commissioners have also advised that no further action is required where a property previously qualified for the reduction in the market value under the LPT legislation and the liable person declared the reduced valuation when filing the 2013 LPT1 Return. Similarly, no further action is required where a property previously qualified for the exemption and the exemption was claimed when filing the 2013 LPT1 Return. The reliefs will continue to apply for all years up to 2016, inclusive.