EARLIER THIS YEAR, the Government announced that Ireland’s Local Property Tax (LPT) system will be changing from November.

Around 1.4 million letters are being sent to property owners across the country to explain the changes, which will apply for each year from 2022 to 2025.

The tax applies to all residential properties in the country – including vacant properties, properties that were not liable for LPT since 2013, and properties not yet registered for LPT.

Over half of homeowners will have no change to their LPT charge, but just over a third of people can expect to see an increase.

Here’s a look at what you should know about the new system, and how to ensure you’re paying the correct amount.

How do I know if my LPT bill has changed?

Despite changes to the system, the LPT charge will not necessarily be different if you’re already paying it. However, you should still check either way.

The new system was designed to account for a sharp rise in house prices in recent years, but the number of LPT bands remains at 20, just like the old system.

What’s different is that the limits of those bands have increased and widened.

For example, the valuation of houses in band 10 was previously between €500,001 –and €550,000 but is now between €875,001 and €962,500. 

This is what the bands now look like:

As the final line states there, the effective rate of the LPT will be 0.1029% (excluding those in bands 1 and 2) – down from the current rate of 0.18%.

For the majority of homeowners, the value on which their LPT is calculated will increase, but the percentage rate they pay will decrease.

One of the biggest changes to the system has to do with homes built or bought since 2013.

Under the old system, those who purchased a house for the first time or properties built since 2013 were not liable. That’s not the case any more, meaning an additional 140,000 property owners will be included for the next three years.

How do I value my property?

As a self-assessed tax, Revenue requires homeowners to value their properties themselves. To do this, you look at what your property (or properties) will be valued at as per 1 November this year.

As indicated above, the LPT structure is based on 20 valuation bands, so property owners don’t have to value their home to a specific amount (unless your property costs more than €1.75 million, in which case you do).

To help find out which band a property falls into, Revenue has created a valuation tool on its website, which allows users to submit their Eircode to find their property and select it on a map. Users will then be given a price band for their address.

This tool is intended as a guide only. Revenue has told property owners that they should consider the specifics of the property and assess whether its value falls within the band for their area – for some, the value may actually be less than what the tool says.

Revenue has also published guidance to assist those seeking alternative sources of information that they can use to assess their property’s value.

It’s also important to note that certain land and buildings should be included in your valuation, not just the primary residential building itself. This includes gardens, driveways, garages and outdoor structures like granny flats or home offices.

However, only land up to one acre should be included: that means that farmers don’t need to include adjoining farmland or animal sheds.

Can I get an exemption?

Some residential properties won’t fall under the LPT scheme.

These include homes that are certified as having a significant level of damage due to pyrite or mica, residential properties owned by charities or public bodies for the purposes of accommodation, and properties built or adapted for people with disabilities.

A full list of properties that qualify for exemptions is available here (but note that references to properties built or purchased since 2013 will not apply).

Revenue has said that those who are eligible to apply for an exemption are still required to provide a self-assessed valuation of their property, but that they should select the appropriate exemption category on their LPT Return.

How to I tell Revenue the value of my property?

After valuing your property and checking whether you qualify for an exemption, the next step is to submit your LPT Return to Revenue. You must do this by 5pm on 10 November, 2021.

You can submit your return online at Revenue.ie (using myAccount, ROS or the LPT online service), or by post.

Even if you miss the deadline, you are still required to submit a valuation and Revenue will pursue the estimated liability amount.

How do I pay the LPT?

You can pay the charge online via the Revenue’s website, or by using a paper form if you’d prefer to do it in person (although your options are more limited for the latter). More details are available here.

You can pay your charge in a single payment or over the course of the year in instalments.

Payments will commence from January 2022, and the last date for paying in full is 12 January.

Contains reporting by Rónán Duffy.