This document summarizes key considerations for passing on the local property tax (LPT) burden in Ireland. It outlines that the registered owner of a property is generally liable for LPT. For estates, the legal personal representative is responsible for paying outstanding LPT. Representatives must value the property, file an LPT return, and pay the tax as part of their duties. The document also reviews options for deferring LPT payments, Revenue's enforcement powers, and important payment deadlines.

1. Passing on the Local
Property Tax Burden:
Some Practical
Considerations
Tina Curran Associate, William Fry Tax Advisors/Taxand Ireland
Jessica Hayes Tax Consultant, William Fry Tax Advisors/Taxand Ireland
Introduction
Local property tax (LPT) was introduced in Budget 2013
following recommendations in the Thornhill Report. The
relevant legislation includes the Finance (Local Property Tax)
Act 2012 and the Finance (Local Property Tax) (Amendment
Act) 2013, both of which have been consolidated in the Finance
(Local Property Tax) Act 2012 (“the Act”).
After a flurry of resistance among the Irish taxpayers, the LPT
now forms a fundamental part of the total tax revenue for the
Irish Exchequer, and compliance figures reported to date have
proven to be very high. The total Exchequer returns for the
2015 period from LPT have been reported to be in the region
of €305m (including €6m relating to the household charge),
and the overall compliance rate for 2015 has been estimated
to be 97%1
. The Revenue Chairman, Niall Cody, told the Public
1 See Revenue, “Local Property Tax (LPT) Statistics: Preliminary, 2nd July 2015”, available at www.revenue.ie/en/tax/lpt/lpt-stats-0715.pdf .
114 Passing on the Local Property Tax Burden: Some Practical Considerations

2. Accounts Committee on 6 July 2015 that more than 1,000 LPT cases
had been referred to the sheriff for collection. As at that date, no
LPT liabilities had been referred for court action, and Revenue had
not used its attachment powers to secure payment2.
Who Is Liable for Payment of LPT?
Generally, the registered owner of the property will be liable for
payment of the LPT. Revenue has provided guidance for establishing
who is the liable person in more complex situations: for example,
where the legal and the beneficial owner of the property differ.
Revenue guidance states that the LPT is payable by:
›› landlords where the property is rented
under a short-term lease (for less than
20 years),
›› local authorities or social housing
organisations that own and provide
social housing,
›› lessees who hold long-term leases of
residential property (for 20 years or
more),
›› holders of a life interest in a residential
property,
›› persons with a long-term right of residence (for life or for 20
years or more) that entitles them to exclude any other person
from the property,
›› legal personal representatives of a deceased property owner
(e.g. executor/administrator of an estate) and
›› trustees, where a property is held in a trust.
The owner of the property on the liability date is liable for the LPT.
The relevant date is 1 November of the preceding tax year.
Where there is more than one owner of the property, each of
the owners will be joint and severally liable for the LPT, and it is
important that they agree who will file the return and pay the LPT.
Only one return is required per property, and Revenue has the right
to collect the LPT form any one of the owners.
Impact on Estates: Passing on the Burden
As included in the list above, on death, the liability for LPT will
become the responsibility of the legal personal representative of
the estate. LPT is a self-assessed tax, and the person liable for
discharging the LPT is responsible for valuing the property, filing
the return and paying the tax.
Practically, until the point in time where a grant of representation
has been extracted, Revenue may not be aware of the death of
the property owner and that the legal personal representative will
be the person responsible for discharging the LPT. Therefore, the
legal personal representative may not be issued with the notice of
assessment of the LPT. It will be important for any legal personal
representative to check the relevant property to ensure that the
notice is delivered there, or alternatively,
the legal personal representative can
notify Revenue before the LPT deadline.
The legal personal representative must
contact Revenue within 30 days of
receiving the Revenue letter. Details such
as the legal personal representative’s
name, address, PPSN, the reasons why
they are not the owner for the purposes of
LPT and necessary supporting documen-
tation must be provided to Revenue.
As part of a legal personal representative’s duties, there is an
obligation to discharge all liabilities of the deceased’s estate, and
this includes the LPT. Legal personal representatives are obliged
to discharge any liabilities of the estate in priority to making any
payments to beneficiaries.
Valuing a Property
Generally, an absolute valuation for properties is not required
except in the case of properties valued at over €1m. A taxpayer
can seek a valuation from a professional valuer. Alternatively,
Revenue indicates that if the property was purchased or valued
in recent years, the relevant valuation at the time of acquisition
can be used for LPT once it is adjusted for any movements in
the market since the date of acquisition or valuation. Revenue
suggests that other sources of information, such as the
property section of local newspapers, information from local
estate agents and property websites might be used. Revenue
has confirmed that if a taxpayer values a property using the
Revenue guidelines for valuation, the valuation will not be
Generally, the registered
owner of the property will
be liable for payment of the
LPT. Revenue has provided
guidance for establishing who
is the liable person in more
complex situations.
2 See https://www.charteredaccountants.ie/en/General/News-and-Events/News1/2015/July/Local-Property-Tax-so-far-this-year.
2016 Number 2 Passing on the Local Property Tax Burden: Some Practical Considerations 115

3. challenged if the value is €1m or less. Revenue has reserved the
right to review a formal valuation. Once a property is valued for
the purposes of paying LPT in 2013, this valuation can be used
up to and including the tax year 2017 (as extended in Budget
2016). For the vast majority of properties, Revenue’s published
guidance regarding property valuation bands will provide owners
with sufficient information that, along with the owner’s own
knowledge will enable them to determine the correct valuation
band to apply.
For those who find themselves in the position of being appointed
as legal personal representative, the position may differ. As part
of their duties, the legal personal repre-
sentative will be obliged to complete Form
CA24 (Inland Revenue Affidavit), which is
a schedule of the deceased’s assets and
liabilities as at the date of death. As this
is a sworn document, it is best practice for
any legal personal representative to obtain
formal property valuations. The formal
valuation can be used for determining the
LPT arising in the estate period.
Sale of the Property
In the event that the property is sold (either
in the course of administration of the estate
or by a beneficiary at a later stage), it will be important to have
evidence of full LPT compliance that can be provided to the
purchaser or his/her solicitor. Failing to provide such evidence
may result in an amount the LPT amount being withheld from
sales proceeds. Generally, the purchaser’s solicitor will ask for
confirmation in the form of a tax clearance certificate, and this
may form part of the completion deliverable to be provided
before the sale closes. Ultimately, a charge can be put against
the house, and any accrued interest must be discharged before
the property can be sold incumbrance-free.
How Do I Qualify for a Deferral of LPT?
In certain circumstances, a liable person may opt to defer
payment of LPT. A deferral is not an exemption, and interest of
about 4% per annum applies to deferred LPT.
A claim for deferral must be made on the LPT return, and the
return must be filed with Revenue.
The deferred LPT remains a charge on the property and must
be paid to Revenue when the property is sold or transferred.
There are four separate categories of deferral available, and full
details of the conditions and procedures for each of these are
available on the Revenue website:
›› income threshold,
›› personal representative of a deceased person,
›› personal insolvency and
›› hardship grounds.
A person whose income is below certain
thresholds may opt for deferral under the
income threshold category. The income
thresholds may be increased where the
person has an outstanding mortgage on
which he/she is making interest payments.
Only owner-occupiers may opt for this
category of deferral; it is not available
in respect of second homes or rental
properties. Deferral under this category
is granted on a self-assessment basis;
the person makes a claim for deferral on
his/her return and does not have to go
through an approval process.
Revenue approval is required for claims for deferral under
any of the other categories, i.e. personal representative of a
deceased person, personal insolvency and hardship grounds.
Unlike the income threshold category, these deferrals are not
restricted to owner-occupiers. Those claiming deferral under
any of these three categories must also file an additional
LPT2 form, as well as the normal LPT1 return, and provide the
information required on the form.
Revenue Seeking Powers and Penalties
Revenue has wide seeking powers to ensure that taxpayers
fully comply with their LPT obligations.
In the event that an LPT return is not submitted, Revenue
will pursue the collection of its LPT estimate using a range of
methods, including:
As part of their duties,
the legal personal
representative will be
obliged to complete Form
CA24 (Inland Revenue
Affidavit), which is a
schedule of the deceased’s
assets and liabilities as at
the date of death.
116 Passing on the Local Property Tax Burden: Some Practical Considerations

4. ›› deduction from employment income, pension income or
certain payments from the Department of Social Protection
or the Department of Agriculture, Food and the Marine,
›› deduction from bank accounts,
›› referral of the debt to a sheriff or a solicitor for collection
and
›› withholding of refunds of other taxes as payments against
LPT due.
Interest (c. 8% per annum) and penalties may also apply where
the LPT becomes due.
Liable persons who are obliged to file income tax, capital
gains tax or corporation tax returns will incur a 10% late-filing
surcharge if they have not filed their LPT return or paid their
LPT at the time that the income tax, corporation tax or capital
gains tax return is filed.
Self-employed persons should also be aware that
non-compliance with their LPT obligations may impact on their
other business taxes. It may affect their ability to obtain a tax
clearance certificate or to receive refunds of other taxes. An
income tax surcharge of 10% will also apply where individuals
have not filed their LPT return and paid the LPT liability (or
entered into a payment arrangement) by the time that their
income tax return is being filed. This surcharge will be capped
at the amount of the LPT liability where they subsequently bring
themselves into full compliance with their LPT obligations.
Revenue also has the right to act where deliberate undervalu-
ation of property occurs. In these cases, Revenue may raise an
assessment. That assessment may be appealed to the Appeal
Commissioners.
Key Dates and Steps To Be Aware of
›› Assess the market value of the property in line with the
Revenue guidelines and other guidelines outlined above.
›› Complete the LPT return, insert the amount of LPT payable
and select a payment option (direct debit instalments,
bank single debit authority, cash payments through the
Post Office, etc.).
›› File the LPT return:
›› by 7 May if filing a paper return or
›› by 28 May if filing a return online.
›› Pay the LPT liability in accordance with the payment option
indicated on the LPT return. Where you have opted to have
the LPT deducted from your salary or pension, this will be
done by your employer or pension provider. The relevant
payment dates are:
›› 1 July: payment by one single payment or phased
payment starts,
›› 15 July: direct debit payments start,
›› 21 July: single debit authority payment deducted.
Read more on Law of Capital AcquistionsTax, Stamp
Duty LPT, Finance Act 2015
Talk to Judy about your idea on +353 1 663 1720 or jhutchinson@taxinstitute.ie
• Be published in Ireland’s tax technical journal
of excellence.
• Enhance your professional profile.
• Irish Tax Review is read by over 6,000
professionals.
Are you interested in writing for the
IrishTaxReview?
2016 Number 2 Passing on the Local Property Tax Burden: Some Practical Considerations 117