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ACCC Annual Conference Waterford 2013 “Household Valuations & the new Property Tax” Edward Carey FSCSI FRICS Chartered Surveyor & Auctioneer.

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Presentation on theme: "ACCC Annual Conference Waterford 2013 “Household Valuations & the new Property Tax” Edward Carey FSCSI FRICS Chartered Surveyor & Auctioneer."— Presentation transcript:

1 ACCC Annual Conference Waterford 2013 “Household Valuations & the new Property Tax” Edward Carey FSCSI FRICS Chartered Surveyor & Auctioneer

2 Context You are here! LPT is here!

3 Agenda Property Tax –What is it –How will it work –Valuations House Price Register

4 Local Property Tax - Operational Context Finance (Local Property Tax) Act 2012, and Finance (LPT) (Amendment) Act Sections - 17 Parts Very few exceptions Revenue expect significant engagement

5 Local Property Tax - Operational 3 Easy Steps –Compile register of residential properties –Establish register of liable persons –Collect payments Replaces Household Charge & NPPR (from ‘14) Centrally collected & dispersed regionally Provide for Local Authority funding

6 Local Property Tax - Operational Residential Property –“any building or structure which is in use, or suitable for use, as a dwelling and includes any shed, outhouse, garage or other building or structure and any yard, garden or other land, appurtenant to or usually enjoyed with that building, save so much of any such yard, garden or other land the exceeds one acre shall not be taken into account for the purposes of this definition” Exceptions –New houses up until end 2016 –Unsold new houses (“stock-in-trade”) –FTB’s until end 2016 –“Ghost estate” properties (not yet defined) –Charitable properties/special needs accommodation –Long term physical or mental disability –Mobile home, vehicle or vessel –Diplomatic properties Deferrals –Pyrite damaged homes?? –Income limits

7 Local Property Tax - Operational Liable person –Owner of Irish residential property, irrespective of place of residence –Any person with a >20 yr interest in a property –Local authorities & housing associations –Personal representatives of a deceased owner –Trustees Joint ownership Ownership dates – 1 st May 2013 & 1 st November thereafter

8 Local Property Tax Charging Provisions –Valuation date 1 st May 2013 up to 2016 –Then 1 st November thereafter Rates; –€0 - €100k0.18% of midpoint –€50k increments up to €1m –€1m, plus0.18% up to €1m & 0.25% of excess Local authorities can vary by 15%

9 Local Property Tax - Operational Care & management –Revenue Register –Revenue Returns –Obligation on liable person Revenue estimates & assessments Appeals

10 Local Property Tax - Operational Deductions at source –By employers & pension providers –Minister for Social Protection –Minister for Agriculture, Food & the Marine –State payments Deferrals –Income limits –Personal insolvency (for that period only) –Excessive financial hardship Penalties –Max fine of €3,000 –Secretaries of bodies €2,000

11 Local Property Tax – Operational Key dates –March 2013: Issuing of LPT Return forms –1 st May 2013: Valuation & ownership dates –7 th May 2013: Due date for paper filing –28 th May 2013: Due date for electronic returns –1 st July 2013: Commencement date for payments –15 th July 2013: Commencement date for DD’s –1 st November 2016: New valuation & ownership date

12 Local Property Tax - Valuations RICS Red Book Vs Revenue “Market Value”; The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction wherein the parties had each acted knowledgeably, prudently and without compulsion” “Chargeable Value”; in relation to a residential property means the price which the unencumbered fee simple of the property might reasonably be expected to fetch on a sale in the open market in such a manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the property and with the benefit of any easement necessary to afford the same access to the property as would have existed prior to the sale

13 Valuing in a vacuum

14 Local Property Tax - Valuations Self Assessment Revenue valuations? Revenue guidelines –Location –Type –Condition –Age –Local services –Comparable evidence Sources of information –www.psr.iewww.psr.ie –Property websites –Estate agents’ windows –Professional valuation

15 Local Property Tax - Valuations Valuations – Where? –Inspection –Drive-by –Desk-top Valuations – How? –Investment (multiple of income) eg; €700pm = €8,400pa x 12.5% (8YP) = €100,800 –Replacement cost –Residual method –Comparable evidence

16 Local Property Tax – Valuations Granny flats Flooding Living over the shop Extensions Legal issues Planning permission Local authority properties

17 A Little Exercise

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25 Daft.ie - €85,000 PSR.ie - €375,000 (‘10 figure) Investment method Say €550pm x 12.5% (8YP) = €52,800 LPT Liability Variance from €90pa - €675pa

26 Society of Chartered Surveyors Ireland 38 Merrion Square, Dublin 2, Ireland Tel: (0) Dating back to 1895, the Society of Chartered Surveyors Ireland is the independent professional body for Chartered Surveyors working and practicing in Ireland. Working in partnership with RICS, the pre-eminent Chartered professional body for the construction, land and property sectors around the world, the Society and RICS act in the public interest: setting and maintaining the highest standards of competence and integrity among the profession; and providing impartial, authoritative advice on key issues for business, society and governments worldwide. Advancing standards in construction, land and property, the Chartered Surveyor professional qualification is the world’s leading qualification when it comes to professional standards. In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining the Chartered Surveyor qualification is the recognised mark of property professionalism. Members of the profession are typically employed in the construction, land and property markets through private practice, in central and local government, in state agencies, in academic institutions, in business organisations and in non-governmental organisations. Members’ services are diverse and can include offering strategic advice on the economics, valuation, law, technology, finance and management in all aspects of the construction, land and property industry. All aspects of the profession, from education through to qualification and the continuing maintenance of the highest professional standards are regulated and overseen through the partnership of the Society of Chartered Surveyors Ireland and RICS, in the public interest. This valuable partnership with RICS enables access to a worldwide network of research, experience and advice.


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