BACK PAGES: Twenty years ago the property market was beginning to pick up after the doldrums of the 1980s.
The autumn season of buying and selling houses had got off to a good start with a new record price at auction for a house without development potential.
The semi-detached two-storey over-basement house on Ailesbury Road in Dublin 4 was sold for £515,000 (€654,000), almost 50 per cent above the guide price of £350,000 (€444,500). The news was a mixed blessing for house owners, however, as it was also the season for paying the annual Residential Property Tax, which was levied at 1.5 per cent of the self-assessed market value of houses above a certain threshold.
The Revenue Commissioners were already trying to scare people into believing their houses had appreciated dramatically in value over the previous year and thus were liable for much more tax than in 1988. But, as this report by Willy Clingan illustrates, their argument was not that strong.
THE INCREASE in the number of Dublin houses liable for Residential Property Tax this year may be far smaller than the Revenue Commissioners are expecting, according to an economic consultant specialising in housing matters. In a special analysis for The Irish Times, Eoin P Keegan of Davy Kelleher McCarthy concludes that there may be no significant increase in the number of Dublin houses liable for the tax. The Revenue Commissioners have been predicting that up to twice as many Dublin houses as last year may be liable.
Using official statistics, Mr Keegan predicts that a lower percentage of Dublin houses may be liable for the property tax this year than in 1983 [when the tax was introduced by the Fine Gael-Labour coalition government]. He calculates that 4.1 per cent of Dublin houses will be liable this year, compared to 4.7 per cent in 1983. The percentage figure had dropped because second-hand house prices have not risen as sharply as the “threshold value” at which one starts to pay the tax.
The tax is payable this year on houses worth £82,772 [€105,099] on April 1st last, provided the household income was at least £26,654 [€33,844]. When the tax was introduced in 1983, it was payable on houses worth £65,000 [€82,550]. The threshold figure has risen more sharply than average house prices because the Revenue Commissioners base it on the average price of new houses, which rose in price faster than second-hand houses over the last six years.
Householders who have been sent property tax forms by the Revenue Commissioners must return them by next Monday [October 1st]. Considerable fears about the impact of the tax this year have been created by the high-profile publicity campaign mounted by the Revenue Commissioners.
This has reached the stage where a number of accountants are now offering assistance with completing the form. One Dublin firm, Farrell Grant Sparks, is charging £160 (plus VAT) for discussing property tax liability, obtaining a house valuation, and assisting with the completion of the tax form.
The Revenue Commissioners point out on this year’s property tax form that they are aware of a rise in house prices in the last year of 40 per cent, 60 per cent and in some instances 100 per cent. Mr Keegan comments: “The price increases mentioned by the Revenue Commissioners do not reflect the increase in average prices for a range of house types in Dublin. In the circumstances, householders should not feel intimidated into overestimating the market value of their property.”
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