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Homeowners have been warned that tax officials are likely to challenge them if they attempt to undervalue their home for property tax.
The warning comes as 1.4 million letters have started to arrive at homes from Revenue telling people they are required to assess the value of their homes themselves on November 1.
Owners must then submit details by November 7 and pay at this point in a lump sum or indicate which alternative payment option will be used.
Norah Collender, professional tax manager at Chartered Accountants Ireland (CAI), said anyone who would be tempted to undervalue their home to save on property tax would be making a huge mistake.
The tax was introduced in 2013 and there has been no revaluation since then.
“Previously, for properties valued under $ 1 million, Revenue generally accepted appraisals at face value,†Ms. Collender said.
“But under the updated Local Property Tax (LPT) legislation enacted this summer, Revenue has the power to review LPT valuations below $ 1 million.
“LPT is a self-assessment tax and Revenue can use its audit resources to review submitted assessments. So it’s different from before.
She said that means homeowners should be able to defend the appraisal they submit.
“People need to be able to stand on their assessments because they could be subject to challenge,” said the tax expert.
An indicative appraisal tool on the Revenue website provides property value estimates based on recent sales.
However, those with unique homes may need to have them professionally appraised, said Ms Collender, co-author of the 2014 book. Survive the local property tax.
Revenue has warned that sheds, home offices, garages, greenhouses, garden rooms and more than an acre of land (unless it is a farm) will all need to be included in the plan. Evaluation.
Property tax on around 1.9 million properties was paid this year, but next year an additional 100,000 homes will be subject to tax.
This is because those who bought new constructions and others who benefited from exemptions for pyrite damage in Leinster are no longer exempt from the tax.
A large number of people will likely end up paying more than before due to an increase of up to 90% in property values ​​since the tax was introduced in 2013.
And this despite an expansion of the 20 assessment ranges that determine how much people have to pay.
Ms Collender said many homeowners in Dublin, especially those with homes over € 1million, would end up paying more. She advised people not to wait until the Sunday, November 7 deadline to establish values ​​and submit their returns, as income systems could be under pressure.
Even those who have paid tax every year since 2013 have to re-assess and submit a new return.
A Revenue spokesperson said the letters he sent included an estimated appraisal of the properties.
“If we have concerns about a self-assessment made by an owner, we will ask the owner to justify their assessment with evidence from the information sources on which they based that self-assessment,†the spokesperson said. noted.
This information will then be reviewed by Revenue.
“When the submitted assessment cannot be supported, Revenue will engage with the owner to agree on a revised assessment,†the spokesperson said.
Revenue said it has checked appraisals so far and only a small number of homeowners are undervaluing their properties.
Katie Clair of Revenue warned homeowners, “If you don’t submit your LPT return and assess your property, we will use the appraisal tool to estimate your LPT fees and it is those fees that will be associated with the property. “
She said Revenue had a “wide range” of options to secure payment of property tax.
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