The Government agreed on 1 June 2021 to bring forward legislation that proposes changes to how local property tax (LPT) currently operates.

The proposed changes involve:

  • Rate cuts and bands widened for calculating LPT liabilities to ensure most homeowners will face no increase when properties are revalued on 1 November 2021.
  • Property valuations to be reviewed every four years.
  • New properties will be brought into the system each November.
  • Local authorities to retain 100% of LPT collected in their area.
  • Proposed changes

    Under the proposed changes, the majority of homeowners are likely to see no change or a decrease in the amount they pay in LPT.

    If an increase is incurred, it is likely to be no more than €90 (the majority increase by a single band).

    Under the heads of finance (local property tax) (amendment) bill 2021, following approval from the Government, the rate of the tax will be cut and the bands will be widened to make the changes affordable and to maintain the overall structure of the LPT.

    The overall effect of these changes, together with including properties built since 2013, is projected to deliver a yield of €560m.

    It is Minister Donohoe’s intention to have the bill enacted before the summer recess.

    This will enable Revenue Commissioners to make the necessary technical and administrative preparations to implement the various changes to the LPT in advance of the valuation date of 1 November 2021.

    When did the local property tax start?

    The LPT came into effect in 2013. Anyone who owns a residential property in the State must pay this tax.

    A residential property is any building or structure, which is used as, or suitable for use as, a dwelling.

    The LPT does not apply to development sites or farm land. Certain other properties are also exempt from LPT.

    The liability date for 2013 was 1 May 2013. The liability date for 2014 was 1 November 2013. Since 2014, the liability date is always 1 November in the preceding year.

    If I sell my property in August 2021, do I need to pay LPT for 2021?

    If you own the property on 1 November 2020 and sell it any time before 1 November 2021, you are liable for the LTP for 2021.

    This should be paid before you close the sale of your property in August 2021.

    How do I know how much LPT to pay to Revenue?

    The tax you pay is based on the market value of the property. This is a self-assessment tax, so you calculate the tax due based on your own assessment of the market value of your dwelling.

    Revenue provides guidance via an online guide providing indicative values for different property types in your local area.

    The Revenue online guide is divided into various bands, commencing with property valuations of €100,000, going upwards in multiples of €50,000, with the equivalent rates applicable for LPT purposes.

    You can also check the register of residential property sales, published by the Property Services Regulatory Authority (PSRA), when deciding on the value of your property.

    The actual tax charge you pay on the property is based on its value on the valuation date (1 May 2013). The next valuation date is 1 November 2021.

    Revenue can query your valuation if it has reason to believe your property has been undervalued.

    Do I need to hold proof of how I assessed my property value in case of queries from Revenue?

    You do not have to include supporting documentation when submitting your LPT return.

    However, if Revenue queries the valuation, your information sources will be necessary.

    These can be the property section of a local newspaper, local sales prices of similar houses sold or details from the Revenue’s valuation guidance document.

    Revenue provides a range of methods for paying this tax, such as one single annual payment or payment in equal instalments over the year.

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