Residential Property Tax

Residential property tax was abolished with effect for all valuation dates beginning on or after 5 April 1997.
Residential property tax was an annual tax chargeable on the market value of residential property owned and occupied on a valuation date which is 5 April each year.

A residential property is defined as a building, or part of a building, used or suitable for use as a dwelling, and the gardens attaching to the dwelling. Usually a residential property will consist of a house and garden. If a building is divided into apartments, each apartment will form a separate residential property if owned and occupied by different persons.

A residential farm building will include the dwellinghouse with any garden, but will not include out-houses, sheds or lands apart from the garden.

A house which is let by a person will not form part of that person’s residential property but may form part of the residential property of the lessee.
A person’s foreign property is chargeable to Residential Property Tax where that person is domiciled in this country. If, therefore, a person is domiciled in the State and owns an apartment in Spain which is available for his/her occupation, the apartment will form part of that person’s residential property.

Ownership
A person will be regarded as owner if that person, whether solely or jointly:
holds a freehold interest in the property
holds the property under a lease of more that 50 years
is the owner under a mortgage
rents the property where (i) the duration of the lease is 50 years or less and (ii) the rent payable is less than 80% of the open market rent (at the time when the rental agreement was made).

A person is not regarded as owner if he/she :
is chargeable to income tax (e.g. benefit-in-kind) in relation to the occupation of the property or
pays a full market rent, or
occupies the property under a caretaker’s agreement.
Occupied

“Occupied” is defined, in relation to a residential property, as having the use thereof, whether actually used or not. The words “whether actually used or not” cover the case of a holiday home which may be used as a residence during the year but may not actually be occupied by the owner on 5 April in a particular year.
A residential property will not, however, be taken to include a property which is normally let by a person but happens to be temporarily unlet on a valuation date (5 April) in any year.
Where a person is in the process of selling one property and has purchased another, only one property will be liable to Residential Property Tax (generally this will be the property in which the person is residing and where furniture is located on the relevant valuation date).

Valuation
For Residential Property Tax the value of a residential property on 5 April, 1996 is defined as the best price which the property would have been expected to obtain if sold on the open market on that date.
In valuing the property no deduction should be made for a mortgage or any other charge affecting the property.

Where a property has been altered or improved to cater for an incapacitated person normally residing therein, the market value of the property on 5 April, 1996 can be reduced by the value attributed to such alterations or improvements.
Any value submitted by a person in respect of his/her residential property will be subject to review by the Revenue Commissioners, and if the Commissioners consider that the value has been understated, they may re-value the property and assess the tax on the revised value. The taxpayer has the right to appeal against any value proposed by the Revenue Commissioners.

More about Residential Property Tax here

Property tax valuation Residential ValuationsDec 4th, 20120 comments