Category Archives: Residential Valuations
Determine the market value of the property
Any house, apartment or lodge which is habitable and which could be sold separately will be subject to the tax.
The market value of the property must be determined as of 1st May 2013 and will form the basis of the annual charge for 2013, 2014, 2015 and 2016. Any home improvement changes or increases in property prices during this period will not affect the property tax liability.
Valuing urban homes in estates in cities should be relatively straightforward using online resources
Valuing farm houses, one off houses in rural areas and large country houses will present more of a challenge. If two individual units are tied by a planning consent which intrinsically links the two, then in this instance they would count as one dwelling. On the other hand, a main residence with separate ‘granny flat’ may require a return for two residential units. The same would apply to a period house with a staff lodge and gate lodge.
How to Value your Property
The valuation of residential properties is generally done through direct comparison, i.e. if an identical house on the same road recently sold for €300,000 then the value of the house being valued will most likely be €300,000.
All house price sales from 2010 are listed on www.propertypriceregister.ie Other resources included the property portals such as www.myhome.ie and www.daft.ie. These websites are useful because the information from the property price register is placed on maps, making it easy to identify where the most recent homes have sold relative to the home being valued.
Analysing Comparable Information
Unfortunately, it is very unlikely that an identical home will have been recently sold and some analysis with adjustments to reflect the differences in size, location, condition and date of sale will be required.
There is no strict rule on how to draw comparison from nearby sales but adjustments to the values achieved are generally required to reflect the following;
- Service charge
- Garden aspect
The above is not an exhaustive list and the individual points can have more or less impact depending on the type and location of the property being valued. More weighting should be applied to the most recent sales evidence of similar type properties with close proximity to the property being valued.
If it becomes apparent that professional advice is required, it is worth noting that the responsibility still rests with the owner to have a correct valuation. If the valuation advice provided is incorrect then it is the owner who is liable for fines / penalties.
Landlords should be aware that the Local Property Tax is not currently deductible for tax relief
Ensure your property value is in the correct band
There are 20 valuation bands starting from €0-€100,000 and ending up at values greater than €1m.
In determining the amount to pay, Revenue has a calculator available on its website www.revenue.ie
For valuations over €1m, a precise valuation is required by the Revenue Commissioners in order to accurately calculate the Local Property Tax due.
Filing Local Property Tax Returns
Payments can be made by bank transfer, or by monthly direct debit, or be made online for which there is an extended deadline of May 28th
Another option is to have the tax deducted as source by your employer.
After years of calling for property price clarity and lagging our UK neighbours by some distance we overcame data protection sensitivities and began publishing residential property sale prices in September 2012. The register was poorly formatted, lacking in depth and detail and littered with mistakes. Nonetheless transactional information in a dysfunctional market was broadly welcomed.
The Residential Property Price Register is produced by the Property Services Regulatory Authority (PSRA) pursuant to section 86 of the Property Services (Regulation) Act 2011. It includes Date of Sale, Price and Address of all residential properties purchased in Ireland since the 1st January 2010, as declared to the Revenue Commissioners for stamp duty purposes
It is important to note that the Register is not intended as a “Property Price Index”.
In a small number of transactions included in the Register the price shown does not represent the full market price of the property concerned for a variety of reasons. All such properties are marked **.
If the property is a new property, the price shown is exclusive of VAT at 13.5%.
The PSRA disclaims the property price data by saying…
“The information in the Register is that which is filed for stamp duty purposes with the Revenue Commissioners by those doing the conveyancing of the property. At present nearly 100% of the data is filed on-line directly by the purchaser’s solicitor. Any errors in the data are errors made by those filing the data. The PSRA does not in any way edit the data. It simply publishes, in a fully transparent manner, that which is filed.”
The Authority acknowledges that there are errors in the data. Where errors are discovered or reported to the Authority they will be taken up with the Revenue Commissioners.
RICS Valuation – Professional Standards (the ‘Red Book’) contains mandatory rules, best practice guidance and related commentary for all members undertaking asset valuations. The Red Book publication details mandatory practices for RICS members undertaking valuation services. All those who occupy, own, develop or trade tangible and intangible assets in today’s global markets rely on competent and impartial valuers.
Valuation matters to us all. Valuations underpin nearly all financial decisions from home mortgages to major investment and corporate finance transactions or stock exchange listings. Valuers play an important role in the move to converge the world’s accounting standards under International Financial Reporting Standards (IFRS).
To what types of valuation do RICS Valuation Standards apply?
As a general guide, the following property types currently fall within the scope of the RICS Red Book:
o Land and buildings (commercial property, residential property, agricultural property)
o Businesses and intangible asset
o Plant and equipment
o Personal property
o Mineral assets
In broad terms the Red Book applies to the following valuation purposes:
o Loan security
o Financial reporting (including valuations for investment funds and
o Investment portfolio performance
o Takeovers and mergers
o Stock exchange (eg IPOs)
o Purchase reports (other than pricing advice provided in the course of
agency which is exempt under PS 1.2)
o Taxation (other than valuations which are subject to separate statutory
Unless produced for reliance by third parties, rent review/lease renewals are generally considered to be advice provided in the course of negotiations and are exempt under VS1.1
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.
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” 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).
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
Griffith ’s Valuation is the name widely given to the Primary Valuation of Ireland, a property tax survey carried out in the mid-nineteenth century under the supervision of Sir Richard Griffith. The survey involved the detailed valuation of every taxable piece of agricultural or built property on the island of Ireland and was published county-by-county between the years 1847 and 1864.
The process of valuation was painstakingly thorough, involving multiple visits by valuation teams to analyse all of the factors influencing the economic status of the property: the chemical and geological properties of the land; average rents paid in the area; distance from the nearest market town. The aim was to get as accurate as possible an estimate of the annual income that each property should produce. This is the “Net Annual Value” figure (in £ s d, pounds sterling, shillings and pence) in the far right column of each valuation record. This was then used as the basis for local taxation, and continued up to the 1970s. The local authorities decided on a percentage of the Annual Value to be paid every year and usually expressed as “pennies to the pound”. For example a rate of 3 pennies to the pound meant that someone in possession of property valued as £10 would have to pay 30 pence, or 2/6.
The individual in economic occupation of the property was responsible for payment of the local taxation based on Griffith’s, with one exception: tenants with a holding valued at less than £5 annually were exempt, but their landlord was liable for the tax. This liability was a powerful incentive for landlords to get rid of smaller tenants in any way they could and certainly contributed to the wave of evictions that took place throughout the second half of the nineteenth century.
Much more about Sir Richard Griffith including maps here