The Local Property Tax Bill 2012 was signed by President Higgins on 26 December 2012 and is now enacted into law as Finance (Local Property Tax) Act 2012 (Act No. 52 of 2012). The Act is available from the Oireachtas websites.

Guidance on LPT and an online calculator can be accessed from the Revenue website www.revenue.ie

The main features of the Local Property Tax (LPT) have been available since Budget day. The principal points of interest in the legislation have to do with the administration and enforcement of the tax, and Revenue have been granted additional powers in the administration of LPT. This is a significant piece of legislation, running to 159 sections and a Schedule. It is largely stand-alone, while borrowing some of the collection and enforcement mechanisms from the Taxes Consolidation Act 1997.

Under Part 15 of the Act, Revenue will have the power to obtain information relating to a property and its ownership from third-party sources. These include a range of Government agencies and local authorities, but also include electricity suppliers, gas suppliers and An Post.

The Act also clarifies that 2013 is in effect a transitional period of assessment. The liability date will be 1 May 2013 only for the year 2013. Thereafter it will be 1 November. Similarly the payment date will be 1 July 2013 only for 2013; it will be 1 January in subsequent years. Hence the Local Property Tax will provide a significant cash flow advantage for the Exchequer, given that the bulk of the money can be expected at the start of each calendar year.

The other features include:

The Household Charge will be abolished for 2013; however, outstanding liabilities in relation to 2012 will be pursued. Any arrears for 2012 will be capped at €130 if paid before 30 April 2013. From 1 May to 30 June 2013 normal Household Charge collection, late payment fee and interest procedures will apply. Thereafter, any outstanding Household Charge will be increased to €200 and treated as Local Property Tax due on the property.

The Non Principal Private Residence (NPPR) Charge continues to apply for 2013, but will be abolished for 2014. Therefore, in 2013, second residences and rented properties will be subject to both charges.

Generally the owner of the property will be liable to LPT; otherwise the liability will rest with the tenant in the case of long leases (over 20 years) or life tenancies. Co-owners will be jointly and severally liable for the tax.

All properties, irrespective of valuation, will be subject to LPT – there is no de minimis value below which a property is exempt.

Houses valued over €1m will be chargeable to LPT on their market value, with no banding applied. The rate will be 0.18% up to €1 million and 0.25% on the excess value over €1 million.

Certain properties will be exempt, similar to exemptions from the Household Charge. These include newly constructed but unsold residential property. In addition, second-hand property purchased by a first time buyer between 1 January 2013 and 31 December 2013 will be exempt until the end of 2016.

Deferral arrangements are available for owner-occupiers where the gross income does not exceed €15,000 (single) and €25,000 (couple). These limits can be extended where there is an outstanding mortgage and gross income less 80% of mortgage interest falls below €15,000/€25,000. Marginal relief will apply for owner-occupiers where income is €10,000 above the relevant limit.

TaxSource Extra, Chartered Accountants Ireland online tax legislation service has recently been updated to include the full text of the Local Property Tax Act 2012 which TaxSource subscribers can search, read, and print as required.