The Local Property Tax (LPT) will come into effect from 1 July 2013 with a half year charge applying for 2013. The Revenue Commissioners will administer the LPT. Aside from some exceptions, owners of residential properties, including rental properties, will be liable to pay the LPT which will apply on a self-assessed basis.
Individuals can self-assess the value of their property or follow Revenue's guidance on this process. The initial valuation (which must be carried out on 1 May 2013) is valid up to 31 December 2016. For the first 18 months (up to 31 December 2014), the national central rate of LPT will be 0.18% of the first €1million of value with 0.25% applying to the excess. From 1 January 2015, local authoritoes will have the discretion to vary the rates by +/- 15%.
The market value of the property will be divided into bands with the initial band covering €0 - €100,000. Thereafter, bands of €50,000 width will apply up to €1million. The tax liability will be calculated by applying the tax rate to the mid-point of the band. No band will apply where houses are valued at over €1million (0.18% on the first €1million and 0.25% thereafter).
Newly constructed but unsold residential properties, mobile homes, vessels, houses in certain unfinished estates and unoccupied principal residences by reason of long term mental illness or infirmity will be exempt from the LPT.
There will also be an exemption until the end of 2016 for new and previously unused properties that are purchased between 1 January 2013 and 31 December 2016. The exemption will also apply for second hand property purchased by a first time buyer in 2013. The LPT is expected to yield €250 million in 2013 and €500 million for a full year charge.
The household charge will cease with effect from 1 January 2013. The NPPR charge will cease with effect from 1 January 2014. However, unpaid arrears along with interest and penalties on NPPR and the household charge that have accrued will remain a charge on related property.