The property tax: what now?

The property tax: what now?

People will have to pay a property tax on their homes from July 1st next year

So the property tax is finally here. Or at least it will be come July 1st next year.

It would have been no surprise to anyone to see the new charge announced in Wednesday’s Budget. However, that doesn’t make it any less easy to bear for households who are already struggling – many of whom have already paid an abundance of tax on their home in the form of stamp duty.

Now that the long talked about tax is here though, what next?

Well, nothing really in the short term. The exact legislation will be drafted shortly but homeowners will have nothing to do until March, when they will receive an information pack from the Revenue Commissioners explaining what the Local Property Tax will fund and why it is necessary.

In that pack will be tips on how to estimate the value of your home and an estimation guide for your area. The tax, which will be paid at a rate of 0.18% for homes valued at up to €1 million and at 0.25% for homes valued at over €1 million, will be self-assessed and people will have a LPT Return form to fill out, which must be returned by next June.

There are those who will try to devalue their home for the purposes of saving money but the Revenue will have the right to reject a valuation they believe to be too low. have developed a property tax calculator to give people an idea of what they can expect to pay out for the charge when it is introduced while people have been encouraged to use the recently launched Property Price Register to determine the current selling price of homes in their area.

The Register will not be of use to many. For a start it doesn’t give an idea of how many bedrooms a house has or what size it is. It also doesn’t take into account any developments that a homeowner might have carried out over the years such as putting on an extension, developing their garden or insulating their home.

What hasn’t been too widely reported, however, is that valuations will be based on the market value of your property on May 1st 2013. With the likes of mortgage interest relief abolished and everyone worse off as a result of this week’s Budget, the likelihood is that prices will fall further in the next six months meaning certain people might benefit from lower house values.

It all represents a major blow though for anyone looking to sell, particularly the select few selling for in and around the €1 million mark but also those who fall in and around select bands. If you pay €275,000 for a house next year, for example, it will be very hard to argue that it is only worth €250,000 when you go to pay the tax.

That could drive prices down either more and have an impact on the slight recovery the market has seen in recent months.

Of course, there are exemptions for the next four years for first time buyers and they are, in the main, driving the revival at present. Those exemptions though in no way make up for the loss of mortgage interest relief. Instead of saving up to €25,000, the savings for the average first time buyer now amount to just over €1,200.

Surprisingly, one of the main headlines in the build-up to the Budget surrounded the new so-called Mansion Tax, whereby owners of properties valued at €1 million or more pay at a higher rate of 0.25%.

However, based on our summaries below that is unlikely to have a major impact on the market given that only around 1% of houses in Ireland are valued above that mark with less than 200 properties per year selling for that. Where problems could arise, however, is in the rental market. With owners of properties liable for the charge, they will more than likely pass this on to their tenants, who in turn will be facing higher rental costs from next summer.

Property transactions over €1 million


Total number of properties sold: 20,816

Total number of properties sold for €1 million or more: 194

Percentage of total sales over €1 million: 0.93%


Total number of properties sold: 18,070

Total number of properties sold for €1 million or more: 150

Percentage of total sales over €1 million: 0.83%

2012 (up to November 30th)

Total number of properties sold: 20,478

Total number of properties sold for €1 million or more: 172

Percentage of total sales over €1 million: 0.84%

Source: Price Register.

There are 32 comments for this article
  1. Patrick at 8:44 pm

    Not much left to say guys, except,We will not forget.The blatant pre election lies. The post election,No we did not say that.The sheer barefaced denials,and the disregard for the people who elevated them to high office, only to be denied again, and again. No we will not forget the children who will be further deprived,the carers driven to despair,the householders fighting to keep the roof over their heads,the aged just trying to survive. At least in the last analysis the previous government told us as it was,and we would have to bear the brunt of what had gone before. We did not need to be misled into believing that we were going to be saved from fate worse then death. Yes We Will Remember.Rates or No Rates.Certain ratings will no doubt revert to those of previous times.

  2. Paddy at 3:18 pm

    A article which acknowledges “house prices are likely to fall”…… WOW, it took 5-years to get to this level of honesty!
    The principle killer of Irish property sales is the unrealistic expectations of sellers who’s expectations are inflated by article after article from ‘property industry experts’ predicting “price increases are just around the corner”. should continue to tell the truth by saying “sell now as prices will continue to fall”. Lower expectations will help get the market moving, get new owners in houses thereby preserving thousands of jobs in the property and related construction, decorating, furnishing, removals and landscaping industries. And an indirect effect of lower housing costs is a more internationally competitive Ireland as for every Euro saved in housing costs, an employee has to earn two Euros less to maintain their standard of living, and an employer has costs of up three Euros less to recover from his customers.
    Keep up the good work

  3. kaykay at 10:15 am

    Paying on the value of the house makes no should be on footage. This would remove the inequity around high prices depending on locations. I agree with the tax in principal but the timing is all wrong. Most people are struggling to pay mortgages and now have this extra expense, it may just break the camel’s back. Does the Government want people to lose their houses? Its ridiculous. People just wont pay. How far will they go to get this money and to what expense?

  4. Tom Kennedy at 9:20 am

    The argument that every country in Europe has a property tax therefore we should also have one, is irritating. Why cant we continue to go our own way in matters that affect this country? There are many things in other countries that we dont have such as free GP care, no VRT etc etc etc but we dont see the same arguments back. My biggest fear is that this tax will rise by stealth especially as local authorities get the power to raise it by 15% as is planned. Why should people who have worked bloody hard to buy their own homes be now hit with an asset tax – its the equivalent to hitting people who have saved a lot of money and been careful in the boom years with an annual tax on their savings.

  5. Dave at 9:58 am

    Forgot to add, If you have to submit your own valuation then all the people in my park with the exact same house could all be paying different amounts. Based on the current climate and the fact that house sales are at an all time low you can guess what price I’ll be putting on my house!!! And then halve it.

  6. Dave at 9:54 am

    They genuinely haven’t thought this through again. In the UK the same tax applies but they have all their services included, for example you don’t pay for bin collection. They need to take a “Lean approach” (make the country more efficient, streamline and saving money) they think it’s our duty to dug them out of this hole. The government said they can see the light at the end of the tunnel? This is the same group of people who also said this budget was going to be fair!!!

  7. Stephen Byrne at 11:29 pm

    Cromwell has returned to Ireland. We now have a government who is abusing its citizenry with treats of “Big Brother” tactics if they oppose the property tax.

    Why should people pay a property tax or stamp duty on their own home.What does any government give in return for these outrageous charges.

    Is it our fault that the previous government and so-called opposition parties did nothing to curb the excesses of the financial institutions?

    Bad performing governments should be penalised, not its citizens.

  8. Mairéad at 9:03 pm

    I’m not a fan of how the new property tax is being organised, it has unfair written all over it but I am more than a little perplexed about the many ‘stamp duty’ payer complaints. I am under the impression you only paid stamp duty if you were purchasing a second property,therefore frankly if you decided you could afford 2 properties then I don’t see how you can claim it is unfair to pay the tax on both! I purchased my home just 3years ago & inspite of being more than able to pay my mortgage at that stage (the bank even tried to encourage me to buy a home worth up to €50000 more than I was willing to aim for). Now thanks to copious wage cuts/levies & increased cost of living/loan repayments I am forced to get a tenant to make sure I don’t go into arrears. Like it or lump it, it makes sense to tax property owners, but it makes more sense to tax big earners & it’s a pity the government are so busy protecting their own ridiculous wages to see that the only way to a level playing field is to introduce another taxband! Oh well, plenty to give out about for another year eh?

  9. Peadar MacMillan at 12:45 pm

    Remember the last election ? Labour and Fine gael manifesto – top of their agenda – burn the bondholders – 100,000 jobs. We are paying property tax because our politicians had not got the mid anatomy to take on the Euro crats. Instead they have gone for the soft targets and have decided in their lack of backbone to burn us instead. What a bunch of school yard bullies our Government are.
    The solution is mass protest at this outrage. We the people need to protest and force our government to remember their manifesto, on which they were elected. They should be forced to stop these ridiculous payments to the Eurocrats and if not we should have a re – election. Look at Iceland – a small country with a small population – we could copy them – but unfortunately I do not think the Irish Government have their Viking back bone and mid anatomy. We are back to where we were under colonial administration. We no longer own our own properety, the most vulnerable are neglected, and the method of forcing people to pay these new taxes is threats and bullying. There is not one living politician in this country that I would have any admiration or respect for. Liars, bullies, traitors. Will we mass protest ? I doubt it. I remember the last recession and unfortunately – it seems to be the same people protesting today. We have changed and seem to have lost our backbone. We can still renade on these ridiculous repayments but not with this government, or with this government – if we the people force them to do so on our behalf – if enough of us take up the fight and mass protest in the new year.
    Peadar MacMillan.
    {Irish – but not too proud of it.}

  10. desmond connolly at 8:48 pm

    i agree with it i hope it does not go up in later budgets it money for anglo bank bad money yours desmond

  11. John Phelan at 4:33 pm

    About time we re-introduced a residential property tax but I have reservations about the value basis of calculation, somewhat inequitable? Should be closer related to services and infrastructure but with some contriols to ensure that local authorities operate efficiently and don’t waste vast sums of money such as here in Galway City.

  12. Peter Murphy at 3:56 pm

    WHO is going to be the eventual AUTHORITY on the REAL value of ANY property, I assume the Government of the day will try and impose their will if not now but when the house-owner becomes desceased. In France during the ’80’s houses were changing hands at very low prices on paper which distorted the REAL MARKET PRICES, that may now happen here. Anyway “nothing is as it seems in Ireland”. Also NAMA is now distorting Property Prices in Ireland…………that’s a start. What happened to the “rule-of-thumb” that Rental Income from a Property was a good guide to the Market Value of a particular property.

  13. Paddy Purcell at 3:48 pm

    1 I do agree with property tax long overdue
    2 I don’t know why people should give false information
    3 I don’t think it will affect the market
    As someone who payed off his mortgage when interest rates were in their mid teens I am not impressed by the stamp duty argument. Believe me there is many a thing I had to forgo to pay my mortgage.
    I know times are hard but they are hard for everyone

  14. seamus dooley at 3:47 pm

    when residential rates was abolished the value of the rates envolved was added to our income tax. now that the new LPT is being introduced we should be entitled to appropriate reduction in income tax

  15. Caroline Coogan at 3:00 pm

    I own two houses in Ireland, one on a buy to let and one is our family home. We were both working during the boom years and when the recession hit three years ago, my husband being in construction found no work. We have since emmigrated with our children and have rented out our properties and are strugging with huge mortgages and negative equity. We have no money whatsoever to pay the property tax… so we will not be paying… Its another hit at the middle class. Its better in Ireland to live in off the state than to try to better oneself..

  16. John O’Sullivan at 2:39 pm

    The property tax is extremely unfair on those people who paid huge amounts of money in stamp duty at the peak of the house price bubble until the draconian levels of stamp duty were changed and these people should in fairness have been given generous relief as they are severly struggling with mortgages and with the dip in incomes since the start of the recession.


  17. wyn rees at 2:30 pm

    My wife and I own/live in an 18th century Georgian
    property. As many will confirm living in an antique property does have its trials and tribulations not least is the cost.

    Will due recognition of the cost of looking after one of this countries “important” aged properties be offset in some way ?
    Best Regards,
    Wyndham Rees

  18. joyce bright at 2:15 pm

    Property tax is unfair because it can be seen as a city tax. Properties in the country valued at 350,000 are mansions compared to the same price for a property in Dublin especially. Also on an average minimum wage where there is only one income going into the home in Dublin this extra tax will be almost impossible to pay for some households…………and what is going to happen to those who have not yet paid the household charge…….nothing I bet, it will probably be scrapped.!!!!!!!!

  19. Frank Bodley at 2:11 pm

    Property taxes are inequitable. To make them more equitable they should be related to one’s income.
    The only people not touched by the collapse in property values are those whose lands were rezoned and sold for top dollars–they should have a special tax placed on them of €3.5 Billion, a mere 3.5% of the €100 Billion sitting in Banks..they can afford it…we can’t. That will get us out of difficulty. Let it be €2.5 Billion next year.

  20. Caroline Bennett at 2:03 pm

    I think the property tax is disgraceful, now not only have i to pay maintenance charges on my home but property charges also. I am a single woman with the outgoing amounts of a married couple minus children and how i am supposed to pay a morgage, gas, electricity, monthly tv, phone, tv licence, car, maintenance charges, property tax, water rates, food, clothing, hair cut, dentist, glasses and all the numberous other small items that crop up i.e. birthdays, weddings, funerals etc on one week’s wage is beyond me. This is a complete joke and the government should be ashamed of themselves.

  21. Bought 2 house during boom at 1:57 pm

    How come there is not more outrage from people like myself who paid ridiculous amounts of stamp duty on houses purchased during the boom and now the same people are expected to pay property tax.

    Personally, I paid a total of €55,875 stamp duty to cover two house I bought in 2006 & 2007. The combined property tax for these two properties would be around €405 each per year. By my maths, I think I have paid 69 years worth of property tax, meaning I should not have to pay property tax again until 2074(That is me backdating it to 2006)

    To be honest, I do not expect an exemption for 69 years, but if the stamp duty issue was at least addressed, it wouldn’t leave such a bad taste. It would help a little if the government were to offer some sort of token gesture to at least acknowledge this stamp duty issue.

    I paid the household tax last year on both my properties, naively thinking they would implement the tax correctly given the time to plan it properly. Since the latest property tax was announced on Wednesday, it is fairly obvious that they are not going to address the issue and are just hoping people will go along with the new tax.

    Obviously I am in negative equity to the tune of 50% but this does not bother me as I was the “responsible adult” that decided to buy the properties so that is my own doing.

  22. Maria at 1:50 pm


    I think it is disgraceful that the property tax has been brought in on the basis of the Value. Why
    has it not been based on the square footage.??
    Everyone living in a major city, ie Dublin Cork, Galway etc will pay huge amounts of tax compared to those living outside the cities. Why should someone living in a pokey 1 bed apt approx 56sqm
    living in the city pay more than someone living
    in a 5 bedroom 1500sq house outside the city.
    And another point. Apart from being assessed on the value of your house you are now being brought into a mid band. ie if a house is valued at 302000
    they are paying the same rate as someone who’s house is valued at 349950. The first person is loosing and the other gaining as both are being assessed on the mid band of 325000. In my opinion this is a double insult and wammy.
    I am very angry and people should speak out and protest

  23. martin bonner at 1:45 pm

    its the dreaded rates back again,shame on the gather up government ,especially the LABOUR PARTY(the public sector party). the clock is ticking to the next election, and a good clean out.

  24. Evelyn O Callaghan at 1:45 pm

    People who bought property in the last few years and paid huge stamp duty should be exempt!!!!

    Our young people who worked hard to buy a home will be faced with emigration!
    I’m very angry at the unfairness of it all…..our money bailed out banks which should
    Have been left to fail…..greed has left our country bankrupt!!And unfortunately
    plus ca change!!!

  25. damiangibney at 1:42 pm

    this so called property tax and house hould charge are not lawfull ,phill hogan is a ware and will be draged into the high court in january or febuary 2013 where they will have to admitt defeet you can find out more imfo at our public meeting 2 morow in moat co west meath contact the common law soicity

  26. kg at 1:34 pm

    this is not a property tax – it is a Dublin tax. It is insane that someone could feasibly live in a huge house in the countryside and pay little tax , and yet one could live in a modest house in a nice part of Dublin and pay >€1000 pa.

    The tax should be based on size of house not on value.

    Every country has either a property tax or stamp duty. Only Ireland has both – but of course double taxation is normal in this banana republic.

  27. Josie at 1:34 pm

    I think a property tax is probably a good idea to widen the tax base. However the local services are being enjoyed by the occupier and not nescesarily by the owner and takes no account of their ability to pay. Rates would have been fairer as a user charge but govt went for the soft option again and hit the property owner…

  28. Paddy at 1:26 pm

    Lets have a home valuation database also, it will be realy interesting to compare declared values with asking and selling prices!

  29. Ciaran at 1:24 pm

    As I have said before on this forum, there is nothing unusual in having to pay a stamp duty-like tax and then an annual property tax. It is the way here in Belgium and in every other Member State of the EU except Ireland, until now. As for the rate, in Belgium it is based on a formula related to the potential rental income of the property rather than its value. On my house, worth about € 650000, I paid € 1850 this year while I would pay only € 1170 in Ireland.

  30. Stephen at 1:21 pm

    Very surprising to see a property site talk about falling prices. Article is well written and hits on the main points and problems with the tax in relation to prices.

  31. Colm at 1:11 pm

    The problem I see is that Revenue will set house valuations at the level they need it to be to hit targets of the tax take. For example if the house next door to you is on sale for 150K but they need your house to be valued at 250K they will use the 250K and it is up to you to challenge that valuation. Of course the only way to challenge the valuation will be to get an accredited estate agent to value it. So that will probably cost a couple of hundred euro. For most people the saving in tax won’t be enough to justify this valuation. Also they are already leaking that anyone challenging the valuation may find their whole life put under a microscope by a Revenue Audit.

    So most people will just bite their lip and pay the overvaluation issued by Revenue.

  32. Aisling at 1:02 pm

    what about people who pay management fees, the council dont pay the lighting, repairs, ground maintenance etc in a private estate so why should they pay property tax also.

    also the over 70s should not have to pay it unless means tested

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