Property owners should update LPT but now must also consider VHT

The Vacant Homes Tax (VHT) is due on residential properties that are liable to LPT and are vacant
Property owners should update LPT but now must also consider VHT

This year, property owners must consider the new Vacant Homes Tax (VHT). Picture: iStock

Personally, I think there are far too many acronyms in this world but alas we get to add VHT to the mix.

No, it's not an obscure bandwidth for scanning on your television but rather stands for Vacant Homes Tax. Back to basics first, the reference date for Local Property Tax for the year 2024 is upon us. Those who own a residential property or who have a life interest in such a property are liable for Local Property Tax if they owned the property on November 1, 2023. 

Statistics from the Revenue Commissioners reveal that approximately half of the property owners elect to go with a single debit taken in March, or by direct debit over the 12 months, with a quarter of property owners choosing to pay by debit or credit card and a further quarter of property owners electing to pay via a service provider (such as An Post) or opting to have the Local Property Tax taken as a deduction from their wages. 

Just shy of 1.7 million homes were registered on the Local Property Tax register last year with about 20,000 properties registered for exemption and a further 10,000 properties opting for a deferral of the LPT. As we have passed the LPT reference date, property owners should log in to their LPT portal using their PPS, Property ID and pin number and elect how they wish to pay the tax for 2024. 

As a kicker, self-employed people who do not update their LPT payment method for 2024 will be deemed not to have filed a return and can face a 10% surcharge on their income tax liability when it comes to filing their income tax return. 

Any property which has been newly constructed as a self-build, has been acquired as a new property or brought into use (i.e. has been refurbished and has become occupied, or suitable for use as a dwelling), between November 2, 2022, and November 1, 2023, becomes liable for LPT. 

A taxpayer who owns a property which is newly liable for LPT is required to value his or her property as at November 1, 2021. The taxpayer must value the property, as if it had existed in its completed state on November 1, 2021. It seems odd to value a new property which has come into use in 2023 at its 2021 value given it might not have even existed at that date but this is the date by which all property is valued for LPT in the current cycle until the next valuation date which is likely to be at the back end of 2025. 

A new property can be added by contacting the LPT section of Revenue either online through a taxpayers ROS or Myaccount profile using myenquiries or by phoning the helpline at (01)7383626 or via post at LPT and VHT Branch, PO Box 1. Limerick. 

Vacant Homes Tax

New for this year is also the addition of the Vacant Homes Tax (VHT). The VHT is due on residential properties that are liable to LPT and are vacant. Vacancy is defined as the property being occupied for less than 30 days in the year ending November 1, 2023. 

Even if the property is vacant and occupied for less than 30 days there are some exemptions such as instances where the owner has died, properties actively marketed for sale or rent, properties subject to certain court orders, properties that underwent structural works and property unoccupied due to illness of owner. There are specific conditions for each exemption and care should be taken to ensure an exemption is applied where the conditions are met. 

A property can, of course, be exempted from the VHT and the LPT where it is certified as being derelict. Even though Revenue has written to some property owners whom they believe may be liable for the Vacant Homes Tax, like many other taxes in this country, the Vacant Homes Tax is a self-assessed tax so it is very important that property owners determine whether they have a liability to VHT, regardless of whether they receive a letter from Revenue. 

If your property is liable for VHT, you must make a VHT return by November 7, 2023. If a VHT return is late, there is a 5% surcharge. If the return is over two months late, there is a 10% surcharge. The rate of VHT on a property is three times the basic rate of Local Property Tax for the property, with the LPT being of course governed by the valuation band and the council area charges or discount.

It was announced in Budget 2024 that the rate of VHT will increase to five times the basic rate of Local Property Tax for the chargeable period November 1, 2023 to October 31, 2024. The application of penalties makes this an important one not to miss, and even more so property owners would be well advised to keep documentary evidence for any additional properties they do own that would assist them in proving that the property is either not liable for the LPT and hence the VHT, or was occupied for the minimum 30 days or supports one of the other exemptions.

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Karen Walsh

Karen Walsh

Law of the Land


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