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Finance Minister Paschal Donohoe has again postponed the local property tax (LPT) revaluation date, meaning that anyone who has purchased new construction since 2013 will remain off the LPT network for at least another year.
The properties were to be revalued for this tax in November, which would have led to changes in payments next year. Donohoe has decided to postpone the valuation date to November 1, 2021, which means that homeowners who do pay LPT will not face a bill increase next year as a result.
The decision means that people who bought a new home since 2013 are not yet required to pay the tax. There are several other exemptions for the tax, including those properties that were not suitable for use as a home in 2013. This means that if it were not habitable as of 2013, the property would never have been subject to the LPT.
Early next year, Donohoe will introduce legislation for the LPT to review the system so that the majority of homeowners will not face an increase in any case. The legislation will also bring in new homes that are currently exempt from the system.
“As with many aspects of our economy, the pandemic has introduced volatility in the residential real estate market and I am also aware of the need to allow sufficient time for the Commissioners of Revenue to introduce the necessary changes to the LPT regime before any new valuation date. ”Mr. Donohoe said.
Following a review of the tax in 2015 by Dr. Don Thornhill, it was proposed that the revaluation date be postponed from 2016 to 2019. Mr. Donohoe initiated a further review in 2019, deferring the valuation until November 2020.
The valuation date is the date that homeowners must establish the market value of their properties. Those values are the basis for the LPT liability calculation. The properties are still being valued as of 2013.
A 2019 review of the LPT suggested that the government should systematically aim for a return of around € 500 million from the tax. The group recommended that the rate applicable to properties worth more than 1 million euros be kept at 0.25%.
“I will submit proposals for primary legislation to implement the government commitments program on LPT in early 2021. These proposals will be designed to ensure fairness and that most homeowners will not face an increase in their LPT responsibilities,” added Mr. Donohoe .
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