Information for preparing for the valuation and filing date for LPT, advice for accountants under extreme deadline pressure, and the Business Resumption Support Scheme registration facility all feature in Irish tax developments.

The next valuation date for local property tax (LPT) is 1 November 2021. Taxpayers are required to self-assess the value of their own property. Revenue is contacting 1.4 million property owners on their LPT obligations and has provided an interactive valuation tool for guidance on valuing a property. The valuation determined on 1 November will apply for the four-year period from 2022 to 2025 and will serve to determine the LPT charge for taxpayers for those years. LPT returns are due by 7 November 2021.

What needs to be done for 2022?

Taxpayers must do the following three things to meet their LPT obligations for 2022:

1. Determine the market value of residential property at 1 November 2021;
2. Submit an LTP return, including the valuation determined on 1 November 2021, by 7 November 2021; and
3. Pay or make payment arrangements for the 2022 LPT charge.

Revenue is issuing letters in advance of the valuation date, which will include the taxpayers property ID and pin for accessing LPT online.

If a taxpayer has not used the LPT online service for previous years, they will be issues with a paper Form LPT1. Taxpayers who are liable to LPT on more than one property, and those with a property valued at greater than €1.75 million must submit their return online. Further information on submitting an LPT return is available on the Revenue website.

Even if a taxpayer is eligible for an exemption to LPT, they must still value their residential property on 1 November and submit a LPT return to claim the exemption in the return.

In its press release on the launch the 2022 LPT campaign Revenue reminds taxpayers whose properties were previously exempt that they need to register newly-liable properties at www.revenue.ie and complete the same three step process. Taxpayers with vacant properties and those claiming an LPT deferral must also submit an LPT return by 7 November 2021.

Valuing a property

Revenue’s interactive valuation tool indicates the average valuation band for properties by ‘Small Areas’. Small Areas are compiled by the National Institute of Regional and Spatial Analysis, on behalf of the Ordnance Survey Ireland. There are about 18,600 Small Areas in Ireland, usually with 50 to 200 properties in each. Revenue, in its press release, is reminding taxpayers that the tool is a guide only. Other information sources for valuing a property are also advised. These include:

• referring to the Residential Property Price Register, to check the price of properties sold in the same area in recent years;
• obtaining a professional valuation of the property; and
• referring to other information sources, such as newspapers, information from local estate agents, and commercial property sales websites.

LPT is payable on any residential property and other land, yards or gardens etc., up to one acre, associated with that property. The part of land, yards or gardens etc., that is to be included in the valuation is the part that is most suitable for enjoyment with the property. Sections 5 of the Finance (Local Property Tax) (Amendment) Act 2021 provides for a revised definition of ‘residential property’. It details that ‘residential property’ includes any building that is used, or suitable for use, as a dwelling. A residential property subject to commercial rates may be exempt from LPT.

Previous provisions which prevented Revenue from displacing self-assessment values of properties under €1 million where their valuation had been established in accordance with Revenue guidance no longer apply. The self-assessed values for properties on 1 November 2021 will be subject to the normal compliance regimes that apply to other self-assessed taxes.

Revenue confirmed at a meeting of the Joint Committee on Housing, Local Government and Heritage on Tuesday 6 July, in which the changes to LPT were discussed, that given the exceptional conditions within the housing market, in preparing its valuation guidance Revenue would not “over-rely or rely too heavily on more recent values because, … they are not necessarily reflective of the underlying market condition”.

Revenue accepted that it is difficult to put a value on a property when a nearby property listed for a certain price went for far above that due to a bidding war. Revenue confirmed it would not necessarily expect to see the final sales value on an LPT return in such cases.

Taxpayers should keep a copy of any information sources used to determine the market value of property.

Determining the charge to LPT

Taxpayers can use Revenue’s online LPT calculator to calculate their 2022 LPT charge.

The valuation determined on 1 November 2021 establishes the valuation band and basic LPT rate for the period 1 January 2022 to 31 December 2025. Each Local Authority can increase or decrease the LPT basic rate by up to 15% (Local Adjustment Factor).

For properties with a market value greater than €1.75 million no banding applies, and the actual value of the property needs to be declared.

Further information on determining the value of a property and calculating the charge to LPT is available on the Revenue website.

Paying LPT

A taxpayer can pay their LPT charge:

• in a single payment in full;
• in phased payments throughout 2022; or
• in phased payments by deduction at source from their salary, wages, occupational pension etc.

A taxpayer can confirm their payment option for 2022 when filing their LPT return. Payment options from 2021 will be carried forward to 2022 unless a different payment option is selected when submitting the LPT return.

Further information on paying LPT is included on the Revenue website.