Ireland: Revenue reviews property tax guidelines as prices escalate
22 September 2014
Posted by: Author: Mary Minihan
Author: Mary Minihan (The Irish Times)
Noonan confirms consultations with Law Society over rate when selling homes
The Revenue Commissioners is reviewing its property tax guidelines to take account of escalating house values in Dublin, Minister for Finance Michael Noonan has confirmed.
Mr Noonan said written clearance from Revenue was currently required when the sale price of the property is 15 per cent greater than the valuation band declared last year.
"Revenue is currently reviewing these guidelines to take account of increases in property values in certain locations since May 1st, 2013 and will be consulting with the Law Society in that regard,” he said.
Mr Noonan said if a vendor selected a valuation band "in good faith” in line with comparable valuations on May 1st, 2013 and sold the property for a higher value in 2014, 2015 or 2016 no additional liability arose.
However, if the vendor selected a valuation band for the property that did not reflect the market value then he or she should "self-correct” the valuation band before finalising the sale.
Any liability crystallises on the sale of a residential property and must be paid in full either in advance of the sale or will be deducted from the proceeds of the sale.
Dublin South TD Olivia Mitchell said she welcomed the review, adding that she hoped it would take into account that house prices "uniquely in Dublin” had risen by up to 25 per cent this year in some cases.
"Apparently any rise above 15 per cent required special clearance from Revenue but this was not at all clear to vendors. While the 15 per cent rule exempts almost every sale outside Dublin, it puts Dublin sellers in a disadvantaged position, and at a time which is already very stressful for them,” she said.
Ms Mitchell said property taxes in Dublin were "a multiple of anywhere else” and likely to increase in future.
There was an onus on Revenue to ensure Dublin sellers were not penalised for failing to anticipate rapidly rising house prices, she added.
"Certainly there should be no question of requiring the back payment of the shortfall between a valid house value declared in 2013 and current market prices,” she said.
This article first appeared on irishtimes.com.