The Revenue Commissioners are to be given the power to defer property tax payments from people who have suffered a “significant and unexpected” financial loss or expense.
The provision is included in a swathe of changes to the property tax which Minister for Finance Michael Noonan has introduced alongside the Finance Bill to give effect to the budget.
According to an explanatory note with the legislation, property tax deferrals in the case of a significant financial loss will be available only to people who can demonstrate they cannot pay the tax without “excessive financial hardship” as a result of the loss or expense.
A Department of Finance spokesman declined to provide an estimate as to the number of potential beneficiaries, saying this would be determined only after the tax comes into force.
The Revenue will set out in new guidelines how this deferral will work in practice. “It will not automatically be available on the making of a valid claim,” the explanatory note says.
Required documentation
“Deferral cannot commence until the Revenue Commissioners have received from a liable person whatever information and documentation they require to make a decision and, having made their decision, notify the liable person that a deferral is allowed.”
A separate measure will enable people to enter a formal insolvency arrangement to defer property tax payments for the duration of their insolvency once they make a valid claim to the Revenue.
Another new provision would impose a €500 fine on the seller of a property who fails to disclose to the buyer the value they put on the property when the tax was last paid.
In turn, the buyer will be obliged to notify the Revenue “where it appears to him or her that the chargeable value declared by the vendor/transferor was too low” when the value was last determined. The objective of this provision is to deter any under-declaration of the property’s value by the owner in advance of its sale.
“The purchaser is only obliged to file a return if, in the purchaser’s opinion, the chargeable value declared by the seller could not reasonably have been arrived at,” said a spokesman for the department.
“If the property has been undervalued, in line with the compliance procedures included in the local property tax legislation, the Revenue Commissioners will pursue the seller for any outstanding tax due.
“Any shortfall in local property tax before the property is sold is entirely between the Revenue and the seller and has no impact on the purchaser.”
Charitable bodies
The new legislation includes a three-year exemption from the tax for property damaged by pyrite as well as exemptions for property used by charitable bodies and for property bought or adapted for people with permanent disabilities.
People in receipt of large court awards – resulting from car accidents, for example – will be completely exempt from the tax if they spend large amounts on necessary adaptations to their property.
Properties owned by local authorities and approved housing bodies will go into the valuation band of up to €100,000 until 2017 and the payable date for the 2013 liability will be extended by until 2014.
There was no reprieve in new draft legislation for property owners who made big stamp duty payments at the height of the boom and no measures to ease the burden on property owners in Dublin.
