A new tax is introduced in the form of the Local Government (Charges) Bill 2009 as passed by the Dáil this month. This tax imposes a €200 annual charge on residential property which is not the principal private residence of the owner– Non Principal Private Residence or NPPR. The €200 euro per NPPR charge falls due for 2009 on 31 July next, with a two month payment window, and a further one month period of grace before late payment penalties start to accrue.

The charge will generally be collected by, and paid to, the various local authorities – county and city councils. The target properties are rental, holiday and certain vacant residential properties. The liability falls on the “owner”, who essentially is the recipient of any rents, or who would be the person receiving any rents if rents were due.

This is essentially a self assessment tax, with late payment penalties but not, apparently, interest charges. Satisfying the requirements of the charge would seem to be a two step process – a declaration and a payment. This declaration can be made through the web-site or in writing on the approved form (presumably obtainable from the local authority), as part of the payment process in either case. Details to be provided will include:

• Name of the owner of the property,
• Address of the property,
• Address for correspondence of the owner of the property
• Personal Public Service Number of the owner of the property in the case of a private ownership
• Tax reference of the owner where the owner is a company.

Payment of the charge at the website www.nppr.ie will require a credit or debit card. Local Authorities (City or County Councils) will accept completed NPPR registration forms. The payment types accepted with a registration form are credit card, debit card and cheque.

The role of the Revenue Commissioners in all this would seem to be limited to information sharing with the local authorities for enforcement purposes. Information will also be obtained from the Private Residential Tenancies Board and the ESB.

There are several exemptions to the charge, the most important of which being:

• Single properties with multiple tenants will be liable to a single charge, provided that each tenant has their own bedroom.
• The charge will not apply to mobile homes with the Minister for the Environment making the distinction “those on fixed foundations will be deemed to be homes. Anything that can be moved by crane or whatever will be deemed a mobile home.”
• The charge will not apply to persons who have to reside elsewhere because of long term mental or physical infirmity. The residential property in their possession but in which they are not residing would have been otherwise subject to the charge.
• The charge is also waived in respect of a residence, occupied by a family member of the owner which is on the same site as the owner’s residence or within two kilometres of the owner’s residence. Provided, that is, that the residence in question is occupied rent free. The exemption also applies to legal guardianship arrangements and ward of court arrangements.

The original estimate provided in the public domain for the amount to be raised by this new charge was €40m. However, according to the Oireachtas Library and Research Service, the system could raise in excess of €97 million.

While this Local Government Charges may seem innocuous at the rate of €200, the Bill makes provision for the Minister “from time to time to review the amount of the charge ”. All of our burdensome taxes have had similar acorn origins, so we hope that this tax has no future ambitions beyond a rate of €200!

FAQs on the Local Government Charge have been published, and are reproduced at 2.01 below.