The Society of Chartered Surveyors Ireland (SCSI) has urged homeowners around the country to ensure that they are fully informed when self-assessing the value of their home for property tax purposes.
The President of the SCSI Roland O’Connell said it was important that homeowners used all the information available for comparison purposes and arrived at an accurate valuation within the correct band; “The property valuation determined now will be used for the next 3 years so it is very important that homeowners, who choose to self-assess the value of their homes, do so diligently and comprehensively to avoid any penalties” O’Connell said.
The SCSI said that homeowners should also be aware of a number of exemptions on property tax, including for first time buyers who are exempt until 2016 if they buy this year. Homeowners should consider the tips below before deciding on a valuation:
1. Determine the market value of the property
- Any house, apartment or lodge which is habitable and which could be sold separately will be subject to the tax.
- The market value of the property must be determined as of 1st May 2013 and will form the basis of the annual charge for 2013, 2014, 2015 and 2016. Any home improvement changes or increases in property prices during this period will not affect the property tax liability.
- Valuing urban homes in estates in cities should be relatively straightforward using online resources
- Valuing farm houses, one off houses in rural areas and large country houses will present more of a challenge. If two individual units are tied by a planning consent which intrinsically links the two, then in this instance they would count as one dwelling. On the other hand, a main residence with separate ‘granny flat’ may require a return for two residential units. The same would apply to a period house with a staff lodge and gate lodge.
2. How to Value your Property
- The valuation of residential properties is generally done through direct comparison, i.e. if an identical house on the same road recently sold for €300,000 then the value of the house being valued will most likely be €300,000.
- All house price sales from 2010 are listed on www.propertypriceregister.ie Other resources included the property portals such as www.myhome.ie. These websites are useful because the information from the property price register is placed on maps, making it easy to identify where the most recent homes have sold relative to the home being valued.
3. Analysing Comparable Information
Unfortunately, it is very unlikely that an identical home will have been recently sold and some analysis with adjustments to reflect the differences in size, location, condition and date of sale will be required.
There is no strict rule on how to draw comparison from nearby sales but adjustments to the values achieved are generally required to reflect the following;
- Location
- Size
- Layout
- Condition
- Specification
- Decoration
- Parking
- Service charge
- Garden aspect
The above is not an exhaustive list and the individual points can have more or less impact depending on the type and location of the property being valued. More weighting should be applied to the most recent sales evidence of similar type properties with close proximity to the property being valued.
If it becomes apparent that professional advice is required, it is worth noting that the responsibility still rests with the owner to have a correct valuation. If the valuation advice provided is incorrect then it is the owner who is liable for fines / penalties.
Landlords should be aware that the Local Property Tax is not currently deductible for tax relief
4. Ensure your property value is in the correct band
- There are 20 valuation bands starting from €0-€100,000 and ending up at values greater than €1m.
- In determining the amount to pay, Revenue has a calculator available on its website www.revenue.ie
- For valuations over €1m, a precise valuation is required by the Revenue Commissioners in order to accurately calculate the Local Property Tax due.
5. Filing Local Property Tax Returns
- Payments can be made by bank transfer, or by monthly direct debit, or be made online for which there is an extended deadline of May 28th
- Another option is to have the tax deducted as source by your employer.
