All You Need to Know About the Local Property Tax (LPT) for 2021
Whether you’re a new homeowner trying to wrap your head around the Local Property Tax, or doing due diligence in preparation for buying your first home, we’ve compiled all the essential facts you need to know about the Local Property Tax (LPT) for 2021.
1. What is Local Property Tax (LPT)?
2. Who Must Pay It?
3. How Much Do I Pay?
4. How Do I Pay
5. What If I Don’t Pay?
6. Deferral of LPT Payment
What is Local Property Tax (LPT)?
The Local Property Tax is a self-assessed tax derived from the market value of your property.
The current valuation date is 1 May 2013, as such, all Local Property Tax charges are currently based on the property valuation on that date. The new revaluation date has been deferred several times, most recently until 1 November 2021, though time will tell if we can expect another deferral.
For the 2013 LPT, the liability date is 1 May 2013 and for subsequent years, it is 1 November in the preceding year. If you are the liable owner of a property on the liability date, you must pay LPT.
If you sold your property after 1 November 2020, you are still liable for the 2021 Local Property Tax on the property.
Do You Need to Pay the Local Property Tax?
All owners of residential property, including rental properties, are liable for Local Property Tax, with the exception of those who bought new-built homes since 2013 (more details below). The following categories of people are also liable for LPT:
- People who have a long-term lease of 20+ years or life tenancies in a residential property
- Anyone with a life-interest in a residential property
- Anyone who lives abroad but owns a residential property in Ireland
- Local authorities and social housing organisations
- Personal representatives of a deceased owner, such as an executor/administrator of an estate
- Trustees, where a property is held in a trust
There are however some property types that are exempt from Property Tax payments, such as:
- New or unused property purchased from a builder or developer between 1 January 2013 and 31 October 2021 (exempt until the end of 2021)
- * Any houses or apartments built and owned by the builder or developer but not yet sold
- “Ghost estate” properties that have remained empty
- * Homes that were vacated by their owners for 12 months or more due to long-term illness
Find out more about the full list of exemptions.
Those who bought and then sold their home between 1 May 2013 and 1 November 2020 are liable for LPT during the years they occupied the property.
How Much Do You Need to Pay?
The current valuation period which started on 1 May 2013 is expected to end on 31 December 2021.
The amount of Local Property Tax due for 2021 is derived from:
a)The value of the property on 1 May 2013, and
b)The 2021 LPT rate applied by your local authority
The basic rate was set at 0.18% for properties valued under €1 million and 0.25% on the amount of the value over €1 million.
So a house valued between €200,000 - €250,000, is calculated with an annual LPT cost of €405
To see how much Local Property Tax you need to pay in 2021, this handy property tax calculator by Revenue provides a quick and easy way to quickly calculate the amount of Local Property Tax due on your property for any period.
Of course, with the new valuation date set for the end of 2021, you should review your rates again to see if they have increased or decreased (although with the current price rises nationwide, it’s unlikely that they’ve decreased since 2013).
How To Pay the Local Property Tax
Revenue offers several different ways of paying the LPT. Homeowners can opt to divvy up payments and cash out in equal instalments.
Whether you’re paying this year or just bought a property and want to get your ducks in a row right now for later payments, Revenue offers a range of methods for paying the tax.
You can opt to make one single payment or you can phase your payments in equal instalments.
Phased payments over the year include:
- Direct debit from your bank account
- Reduction at source from your salary or occupational pension
- Deduction at source from certain payments received from the Department of Employment Affairs and Social Protection (DEASP)
- Cash payments (including debit or credit card) through approved payment service providers.
If you opt for paying in full in a single payment you can do it through:
- Annual Debit Instruction (ADI)
- Debit or credit card
- Cash payments (including debit or credit) through approved payment service providers such as the Post Office, bank, etc.
For hassle-free payments, simply register on LPT Online and set up your preferred payment method. The service provides the option of scheduling payments for multiple periods so you don’t have to worry about missing any payments. It is also mandatory for those who own more than one property to set up their payments online.
What Happens If You Fail to Pay?
If you don’t pay your Local Property Tax, payment will likely be collected anyway. The Revenue can use a wide range of collection methods including:
- Mandatory deduction from your salary, wages or occupational pension
- Attachment of your bank account (this means popping into you’re your account without your consent and picking up the amount owed using an attachment order)
- Referral of the debt to a sheriff or a solicitor for collection
- The withholding of refunds of other tax as payment against the amount of LPT due.
Deferral of Local Property Tax Payment
Of course, if you can’t pay you need to talk to Revenue ASAP. There are certain circumstances whereby an individual might be able to defer or partially defer LPT payment.
These circumstances include situations whereby:
- A person’s income is below €15,000 for a full deferral and below €25,000 for a partial deferral. (€25,000 and €35,000 thresholds apply for couples).
- You’ve just inherited a property/are a representative of a person who has passed away
- You’ve declared personal insolvency with the Insolvency Service of Ireland (ISI) and have an insolvency arrangement in effect
- You’re suffering specific “hardship” as a result of significant and unavoidable financial loss in the current year.
However, be aware, that even if you do qualify for any of the above or deferment for other reasons, you still have to pay up at some stage and you should expect around 4% interest to be tagged onto the original fee. Find out more about deferrals.
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