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05 Mar

Irish Times - Property Clinic (28th February 2013)

Q I am concerned that my mother will have to pay property tax on her flat. It was constructed around four years ago and is adjacent to the family house in which myself and my family live on our family farm. I understand that I will have to pay the tax but what about my mother? Do I need to get her flat valued or is it included in the value of my house as it is technically built onto the side of it? 


A The proposed introduction of a widespread Local Property Tax (LPT) has brought about a great deal of concern among many homeowners. This is understandable given that it is being introduced for the first time and we are all unfamiliar with it. In order to improve homeowners’ understanding of how the property tax will be accessed and collected, the Revenue will shortly be issuing a comprehensive guide which I assume will be issued directly to all property owners and/or freely available from the Revenue web site. This should help to clarify many of the questions that remain. It is worth noting that the tax does not become effective until July so there are a number of months yet to determine your tax status and liability.


The recent Finance Bill has introduced some minor adjustments to the act but it is broadly in line with the originally published proposals. While we wait for further detailed information in this respect from the Revenue Commissioners, one suspects that the matter of a “granny flat” will not have been explicitly dealt with in the Finance Bill.


However, normally such properties are for all intent and purposes considered to be part of the main house. I expect the ownership of the property will ultimately determine whether your mother’s flat will have to be addressed separately or as part of your property.


If it is the latter, then the additional value of the flat will be added on to the value of your own house and this may well push you into a higher tax band. If however, it is considered to be an independent habitable dwelling, then the property will have to be valued separately from your own home despite the fact that it adjoins it.


You mention that her flat is attached onto the side of your house which is located within a farm. This type of property would have a limited market appeal and therefore even if it is to accessed separately, the likely value would be quite low and may well be at the lower end of the value spectrum resulting in a low annual tax charge.


Gerard O’Toole is vice-chairman of the western region of the Society of Chartered Surveyors Ireland, 


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