How will the local property tax changes impact me?
Property tax is going up, is it?
It is but not, perhaps, by as much as many might have feared, with
the changes
designed to reflect a significant bounce in property prices over the past five years, while not hammering people already struggling to keep their heads above financial water.
How significant has the bounce been?
According to the
Central Statistics Office
, property prices have increased by a national average of 23 per cent since November 2021. There have been greater proportional increases outside of Dublin, with 33 per cent property price growth recorded in the Border, West and Mid-West regions. Average property prices in
Dublin
for all types of residential properties increased by 18 per cent.
READ MORE
How do the tax bands work and how are they going to work from November 1st?
The first band, which currently goes from zero to to €200,000, will from November go up to €240,000, while the €200,001 to €262,500 band becomes a €240,001 to €315,000 band with the 20 per cent increases going all the way up through 19 bands peaking at €2.1m. After that point the tax will increase by a percentage of the exact value of the house.
So what will the changes mean for me?
Properties in the first four bands – and that includes the vast majority of homes in the country with valuations under €525,000 – will see their bills increase only marginally as a result of the revaluation. People who own properties valued at under €240,000 will pay €95 a year, up €5 on the current rate, while those with properties valued at between €420,000 and €525,000 will pay €428 a year, an increase of €23 – or just under €2 a month.
And what about people who have houses worth more than €525,000?
A person whose house is in the €630,001-€735,00 band after the revaluation will see their tax liability go from €585 to €618, an increase of €33 while someone who moves into the €1,050,001-€1,155,000 band from the €875,001–€ 962,500 one will see their tax bill jump from €945 to €998 up €53 a year. The top band covers properties valued at between €1.995 million and €2.1 million with this group likely to pay €3,110, an extra €389 a year. Properties valued above €2.1 million will pay the tax based on the valuation of the property, rather than a band.
And how does that work?
Properties in Band 20 face a tax of .0906 per cent on first €1.26 million, plus 0.25 per cent between €1.26 million and €2.1 million and 0.3 per cent on the value over €2.1 million.
Can you give me some examples of what the changes will mean?
A house in Longford that was valued at €115,000 in 2021 is now valued at €149,000, an increase of 29 per cent. It remains in Band 1 but the liability increases from €90 to €95.
A house in Donegal that was valued at €210,000 in 2021 now has an estimated value of €279,000, up 33 per cent. It stays in Band 2 with the liability increasing from €225 to €235.
A house in Cork that was valued at €370,000 in 2021 now has a value of €470,000 – up 27 per cent. It remains in Band 4 with the liability increasing from €405 to €428
A house in South Dublin valued at €1,250,000 in 2021 is now estimated to be worth €1,562,500 and it will remain in Band 14 with the tax liability increasing from €1,627 to €1,767, a jump of €140.
A house in the Dún Laoghaire-Rathdown area that was valued at €3,550,000 in 2021 now has an estimated value of €4,045,000. A homeowner in this situation will continue to pay on self-assessed value with their liability increasing from €8,230 to €10,123, a jump of €1,902.
When it comes to the LPT, who determines how much is paid?
It is ultimately decided by the Government although as it stands local authorities are allowed to vary LPT downward by 15 per cent, and from 2027 they will be permitted to increase the tax by 25 per cent in their area.
And what if I can't afford to pay?
The Government has said that as a result of the cost-of-living crisis the income thresholds for a full or partial deferral of LPT payments will be increased by 30 to 40 per cent. The income threshold for a full deferral for a single person will be increased from €18,000 to €25,000. For a couple, it will be increased from €30,000 to €40,000. The threshold for a partial deferral for a single person will be increased from €30,000 to €40,000. For a couple, it will be increased from €42,000 to €55,000.
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