I am advised by Revenue that, similar to the position that applies in the case of other taxes and duties, penalties can be imposed for various offences relating to local property tax (LPT), such as failure to submit a return or other documentation or the provision of false information. Failure to submit an LPT return or submission of an incorrect LPT return, are liable to a penalty of the amount of the LPT that would be payable with a correct return, subject to a maximum penalty of €3,000.
In the normal course of events, a self-employed person is penalised for the late submission (or non-submission) of an income tax return by the imposition of a surcharge on his or her income tax liability. However, a self-employed person who has submitted his or her income tax return on time can also be liable to an income tax surcharge in respect of the late submission of his or her LPT return or the failure to pay LPT. Where such a person has not submitted his or her LPT return by the time that he or she submits an income tax return, the income tax liability is increased by 10% up to a maximum increase of €63,485. However, where the LPT return is subsequently submitted and the associated LPT liability is paid, the income tax surcharge is capped at the amount of the LPT liability.
Unlike self-employed taxpayers, PAYE taxpayers are not generally required to submit an annual income tax return. Therefore, it is not possible to impose a similar type surcharge on PAYE taxpayers for failure to submit an LPT return on time. While PAYE taxpayers and self-employed taxpayers are treated the same in terms of the amount of their LPT liability, the same treatment is not necessary, and not always possible, in relation to how Revenue addresses non-compliance by such taxpayers. Revenue’s compliance actions are tailored according to the type of taxpayer involved and the most effective way to ensure compliance. This is illustrated by the use of the facility to collect LPT liabilities through mandatory deduction at source from a PAYE taxpayer’s salary or pension, which is considered to be a fair approach in the context of the surcharge on income tax that can apply to self-employed taxpayers who fail to meet their LPT liabilities.
Finally, it should be noted that the vast majority of property owners pay their LPT on time. There is no reason for property owners to put themselves in a position where they become liable to a penalty or surcharge. If an individual has particular financial circumstances which cause difficulties in meeting his or her LPT liability, he or she may be entitled to a deferral of the tax or may avail of one of a number of payment methods to discharge the liability evenly over the course of the year.