Local Property Tax – Budget 2013

Local Property Tax

In a country where home ownership in engrained in our psyche, the introduction of a Local Property Tax has struck fear into the hearts of home owners of all ages and all means. Today Minister Noonan revealed the details.

The Local Property Tax is due for payment by all residential property owners, regardless of whether they are living in the property or renting it out.

Homeowners will self-assess their property for the purposes of calculating the tax. Tax bands will be in clusters of €50,000 i.e. €50,000.00 – €100,000.00, €100,001-€150,000 etc. Whichever band your property falls into, the tax will be calculated based on the mid-point of that band i.e. if your property falls into the €150,001 – €200,000 band, the tax will be calculated at €175,000.

The rate at which the tax is calculated is 0.18% for properties valued at under €1m. Properties that are valued at over €1m will pay tax at 0.18% on the first million and tax at 0.25% on the value of over €1m.

Property ValueCalculationBandBand AverageRate2013 Tax Payable2014-2016 Tax Payable Per annum
€1,240,00€1m @€240K @ 0.18%0.25% €1,200.00 €2,400.00

The tax will come into effect from 1st July 2013, therefore home owners will be liable for 50% of the total due in 2013. The total full year tax liability figure will be set for 2014, 2015 and 2016. This aims to allow homeowners to be certain of the tax due for each of the following years.

Tax collection will be the responsibility of Revenue. Payment of this tax will be possible through various means: direct debit, credit or debit cards, cash payments or deduction at source from salary, occupational payments or certain State payments. For employees wishing to pay the tax at source, Paycheck Plus will facilitate this through payroll when the tax becomes effective in July 2013.

This Property Tax, or Local Property Tax to give the proper title, is ring-fenced funding for Local Government Services. This will make up funding cuts that they have suffered from Central Government in the past number of years. It is worth noting that Minister Noonan has made provision for Local Government to adjust the Local Property Tax up or down within a 15% range by 2015. This will allow Local Government to manage tax rates to suit their funding needs.