Today is the deadline for filing a Local Property Tax return. Despite all the fuss and bother, this really just means that homeowners should have their homework done by today. And that homework is to value your home. Once you’ve worked out what your home is worth, you file it with the Revenue and you’re done. That’s it.
Of course, you can pay the property tax today if you want, but you don’t need to. The deadline for payment is actually the 21st July and I personally don’t see any reason to pay this this tax one minute before then. Why? Well, the Revenue will charge you 8% interest if you’re late with your property tax, but they sure as heck won’t give you an 8% reduction for paying it early.
So having said that, I’ve just filed my Local Property Tax return today, and I’ve set up a direct debit to pay the tax on the 21st July. Job done. I was also pretty impressed to see that the Revenue’s site is holding up to the pressure of all the last minute filers like me. Apparently 100,000 people filed yesterday and there are still another 300,000 left to file today.
The whole filing process was straightforward enough. But then I had worked out the value of my property a while back. And because this tax is self-assessed, working out the value of your property is the most important part of filing. That’s because it has been well reported that the Estimated Values people have received from the Revenue are often higher than the property’s real market value - which means you could pay more tax than you need to for the next three years. And that brings us to a couple of very good reasons to file on time...
If you don’t file, the Revenue will remind you in June, and then they say they will help themselves to the tax by reaching into your bank account, taking it from your wages or even using a sheriff to seize your stuff. But if they have to do that, they will use their own estimate of the tax, not your assessed value of the property. And of course their estimate could be higher than your valuation.
But that’s not all. If you don’t file at all this year, the Revenue will penalise you hard by taking their own estimate of your property tax, doubling it and add 8% (annualised) interest for good measure. It could mean that instead of paying a tax of €157 in July, you could be liable for a tax of as much as €420.
But €420 is way more than double, how come?
Well, the average home in Ireland is worth around €195,000 according to sales figures from 2012. That’s a half year property tax of €157. But many people report that they have been estimated into the next bracket up. So that would mean a Revenue estimate of €202, which they’ll double and add interest to if you don’t file – which will give you a tax liability of €420. That’s a whopping penalty of 168%.
Update Wednesday 29th May 2013
Several hundred thousand people decided to leave filing to the last minute...
... so the Revenue has extended the deadline for filing a Local Property Tax return until 8pm tonight - just to make sure they catch the last few stragglers. They said that an "unprecedented volume" of people filed both online and by phone yesterday. In fact, they report that online registrations were running at 10,000 per hour with another 8,000 returns filed by phone. They were of course very happy with all the last minute registrations saying that it was "testament to the strong voluntary compliance culture of the people of Ireland".
Well, it looks like the compliant nature of the Irish people will result in the Revenue hitting it's €250 million target for the Local Property Tax in 2013 - and they did it without anyone taking to the streets which is quite a result. And that windfall will go up to €500 million next year, and each year until 2016. No wonder the Revenue is very happy.