House valuations for the property tax due to be posted to homes next week are likely to come in lower than expected, resulting in a lower tax bill for individuals.
Details revealed about the new tax due to be announced by Revenue this morning indicate many home owners may be pleasantly surprised, with up to 65 per cent of properties expected to be valued at less than €200,000, resulting in a tax bill of €202 for this half year, and €405 annually for the following three years.
The Irish Times has learned that the letters issued by Revenue from Monday will not include valuations of individual properties, but instead a tax estimate based on average valuations for house types within the recipient’s electoral area.
The process can be checked online by accessing a heatmap on Revenue’s website and selecting your electoral area, and within that area selecting a property type (eg one-, two-, three-bed house). Then they will indicate whether the house was built pre- or post-2000. The site will then present an average valuation for that type of property in the area.
Taxpayers can further drill into this data to establish what sources were used to arrive at this calculation. It is undrestood the data is based on 38,000 observations, and sources for the data include the new Property Price Register (recording values of sold properties since 2010); the Ordnance Survey geodirectory; valuations from a sample of 1,300 properties in Dublin, Limerick, Cork, Waterford and Galway conducted by auctioneers Hooke and MacDonald; average county-by-county asking prices for various house types on property websites myhome.ieand daft.ie, and 1,000 valuations provided by the Sustainable Energy Authority of Ireland.
Revenue has designed the tax to be based on honest self-assessment. For example, if a four-bed house in an electoral area shows an average valuation of €300,000 but an individual knows their four-bed property in the same area is worth €900,000, the onus lies solely with the homeowner to declare it. Individuals planning to sell in the near future will be incentivised to register a higher valuation on the property prior to sale. However, home owners not planning to move any time soon will be expected to come clean to Revenue. It has previously indicated there will be penalties down the line for not doing so.
The tax, which will remain unchanged for four years, has been designed to be simple for individuals to calculate and to pay. It is believed Revenue is erring on the side of caution with conservative valuations in order to get people signed up and paying the tax, which is expected to generate an annual return of €500 million annually.
Home owners in urban areas, particularly in Dublin, are expected to pay higher than average taxes because of higher property valuations in these areas.
