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New Property Tax Bill gives Revenue more powers

The Government has published the Finance (Local Property Tax) Bill 2012, to give effect to the property tax announced in the budget.

The new Bill is expected to be brought through the Dáil towards the end of next week.

The Bill establishes who is liable to pay the new tax and how much they will pay. It also gives new powers to the Revenue Commissioners to collect it.

The Finance Bill bill establishes May 1 2013 as the “valuation date”. This will establish the value of the property until November 2016, when a new valuation will be required.

This means the tax to be paid will remain the same for periods of three years.

May 2013 is also the “liability date”, so people who own property on that date will be liable to pay tax on that property. The liability date for each year after that will be November 1.

People who have a liability to pay the property tax must make a return to the Revenue Commissioners by May 7 2013 by post or May 28 2013 by electronic filing.

The tax return must include a self assessed value of the property, and either payment of the tax, or the selection of a payment method.

These can include the option of having the tax deducted at source by employers under the PAYE system, or a request to the Department of Social Welfare to deduct the tax at source from welfare payments. Other payment options include direct debit and cash payment through a wide variety of retail outlets. Taxpayers can also elect to pay through the credit union system.

Failure to pay the tax by July 1 2013, or by January 1 in each subsequent year will result in the application of late payment interest at 8%.

Failure to make a return or to make a false statement in a return in an attempt to reduce the amount of the tax due are liable to penalties of up to €3,000.

Section 151 of the new Bill obliges certain people or organisations (such as utilities companies) that have lists of property owners or billing details for electricity or gas meters, to make this information available to the Revenue Commissioners if requested.

Failure to comply with such a request can result in a daily fine of €100 until the order is complied with. This appears to be an attempt to overcome data protection concerns which some utilities companies have about sharing their considerable databases with the Revenue Commissioners.

The Bill abolishes the existing €100 household charge from January 1, 2013, and caps the amount of arrears liability to €130 on amounts paid by 30 April 2013. But if the household charge has not been paid by July 2013, it will be treated as unpaid local property tax of €200, and added to the outstanding amount of tax due on that property.

Unpaid or deferred Local Property Tax will remain as a charge against each property. It is liable to be paid when the property is sold by the seller – even if the property is sold or transferred for no payment. If the tax is not paid at the point of sale, the liability for the unpaid tax passes to the new owner of the property.

The Revenue Commissioners are required to establish a register of all residential property in the state and its ownership, and assign a unique identifier number to each property.

All persons liable to pay the property tax will be required to register with Revenue, by sending them details of the person or persons liable and the property concerned. This obligation to register will be satisfied by making a tax return.

Section 38 of the Bill links the submission of a local property tax return with a return for income tax and corporation tax. If a local property tax return is not submitted on time, the liable person’s income tax and corporation tax returns are also treated as not being submitted on time – even if they have been. This results in the surcharging of the property tax due on the persons income and corporation tax returns.

People who own more than one property will be required to make a return by electronic means only.

The Bill also gives Revenue powers to require statements from third parties such as management and letting companies, lessees or occupiers of property, giving details about the property including who actually owns it.

PAYE taxpayers can opt to have their property tax deducted at source by their employers. If an individual does not opt for this method of payment and does not pay their tax, the Revenue Commissioners can require their employer to deduct the tax due at source.

The Revenue Commissioners will also be given power to direct the Minister for Social Protection to deduct the property tax from a liable persons welfare payments. Welfare recipients can also elect to have the tax deducted by the Department of Social Protection.

Revenue can also come after money due under payments to farmers and food producers from the Department of Agriculture, Food and Fisheries.

And the Minister for Finance is enabled to make orders deducting at source the property tax from any other form of payment from a government department or a state agency.

Because the Local Property Tax will be treated like any other tax due for collection by the Revenue Commissioners, the full range of revenue powers under the 1997 Tax consolidation Act will apply to its collection. This may make those who do not pay and who are subject to settlement proceeding liable to having their name and address published on the Revenue Defaulters List.

Non-payment of the tax will also prevent the issue of a tax clearance certificate.

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