How to Pay Local Property Tax

Are your Local Property Tax (LPT) payments and valuation details up to date with Revenue?

It is important for many reasons including claiming the Mortgage Interest Tax Credit or ensuring you receive your funds quickly when selling your property. In addition, failure to meet your Local Property Tax obligations may result in you receiving an unwelcome Revenue letter.

What is Local Property Tax?

Local Property Tax has been around for over 10 years now and is calculated on the market value of residential properties in the Republic of Ireland. It applies to any building (or part of) which is used as, or suitable for use as, a dwelling and may include its surroundings and other structures that belong to the residence such as garages and sheds.

You have to consider Local Property Tax if you are a:

• Homeowner, living here or abroad
• Landlord
• Trustees
• Holder of a life-interest or have a long-term right of residence
• Personal representative of a deceased owner (e.g. executor of an estate)

Am I liable for Local Property Tax?

The property may have been either newly built or has become occupied/suitable for use as a dwelling in the period from 1 November 2022 to 1 November 2023. It may therefore be newly liable for Local Property Tax in 2024 and you should have valued your property and submitted your LPT return by 1^st December 2023.  If you have not yet filed your return, you should do so immediately.

The valuation date for Local Property Tax is 1 November 2021. This means that you will need to value your property as if it had existed on 1 November 2021 and this valuation determines your LPT charge for 2023 to 2025.

You may be purchasing a property this year and typically the previous owner should have the Local Property Tax up to date, you check this with your solicitor.

Exemptions and deferrals

The property may be exempt from Local Property Tax under certain conditions, but a return to claim it must still be made. Deferral of payment may also be available to you depending on your circumstances.

What to do if you are not up to date

In our experience many people only realise they have a problem when they receive an amended assessment from Revenue with a hefty surcharge and a comment: ‘non−compliance with LPT requirements’.

The first thing to note is not to panic, the surcharge only grabs your attention and typically will be removed or reduced to 50% of the actual Local Property Tax liability.

You should ideally have your PPSN, property ID and secure pin to hand and then follow the steps below:

1. Log into your LPT account Local Property Tax (LPT) (revenue.ie) or phone LPT on 01-7383626 (available Monday to Friday from 9.30am to 1.30pm).
2. Resolve the outstanding issues by making payment or filing any outstanding returns.
3. Request LPT department to talk to their Revenue colleagues to ensure that your account is now up to date, this is especially important if you have received that unpleasant surcharge notice. Hopefully then your surcharge will be removed or at least reduced.

What happens if you don’t pay your Local Property Tax?

If you don’t pay, or don’t make a return, you could be liable for a Local Property Tax surcharge.

Revenue can instruct an employer to deduct and pay the Local Property Tax due, they can put an attachment on your bank account and refuse tax clearance certs, interest at 8% per annum and fines may also apply.

If you are a chargeable person (e.g., a Proprietary Director or sole trader) or have a company and fail to meet your Local Property Tax requirements an automatic 10% LPT surcharge applies to your income tax/corporation tax return. This is regardless of whether these taxes have been filed and paid on time.

EXAMPLE

“Jill is a company owner and files her 2023 income tax return on time and she has no additional tax to pay as she had paid her income tax of €15,200 through the payroll system in 2023. A few weeks later she receives an amended Income tax assessment from Revenue with a startling surcharge for non-compliance with Local Property Tax of €1,520. The amount bears no resemblance to her actual LPT charge of only €500 as the surcharge imposed is based on her income tax albeit fully paid.”

The good news is that the surcharge will be capped (at 50% of LPT liability) but action is necessary by Jill to bring her LPT returns and payments up to date and the surcharge removed or reduced.

How to Pay Local Property Tax

How to pay Local Property Tax and when your payment is due depends on the payment option you choose:

On 21 March 2024 using Annual Debit Instruction (ADI).

OR

By 10 January 2024 if paying in person through a Payment Service Provider such as An Post, Omnivend and Payzone.

OR

It can be paid on a phased basis starting on 15 January 2024 by Monthly direct debit.

OR

Starting in January 2024 by deduction at source (from your salary, wages, occupational pension, etc) {Tip: You must receive a salary every month or payments will be missed.}

OR

Starting in January 2024 if paying in person through a Payment Service Provider such as An Post, Omnivend and Payzone.

Remember, tax laws and interpretations can change, so it’s important to get the most current advice based on your specific circumstances. Understanding the system and insightful planning can make that financial difference for you and your family.  So when you’re ready to discuss your needs make sure to talk to our team of tax experts or your Dedicated Account Manager. Book a call here.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only.

Published March 2024