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LPT: How was valuation derived for letter received in the mail

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  • 10-04-2013 10:15pm
    #1
    IsThisOneFree
    Registered Users Posts: 254 ✭✭


    Hi All

    My Mum recently received (as did most of us !!) her letter informing her about her liability for LPT. The letter put her in band 3 - which I felt was an overvaluation of the property. My presumption was that the valuation was based on the property price register for our area for the past few years ..... which wouldn't be very accurate as very few properties have changed hands in our area in the past few years (very rural area).

    I found that daft have an LPT calculator so I used it and it put the property in band 2, which is where I felt the property should be. Next, I found that revenue also have a calculator (I'm guessing they use the same data) and sure enough, it also said that the property is in band 2. So I'm slightly curious, how did revenue manage to come up with 2 different valuations for the same property ? Are the letters based on something other than the data the website uses, or vice-versa ?

    Not too sure if anybody know how these things are calculated, but just thought I'd throw it out there :)

    Thanks in advance
    Tagged:


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Its not a valuation- its purely indicative. If you disagree with it- you return the lower amount. If/when the property is eventually disposed of, the difference would have to be made up, with Revenue's interest rate (currently 8%) compounded.

    In most areas the valuations are arbitrary- due to low volumes of sales. This is a given. The letter your Mum got is only indicative because of this.


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    #3
    IsThisOneFree
    Registered Users Posts: 254 ✭✭IsThisOneFree


    OK yes, it's a guideline rather than a valuation - but so is the "valuation" received on their website, so I'm curious why there's a discrepancy. Are they based on different information ? And if so, is one considered to be more accurate than the other ?

    Interesting that you have to make up the difference if the property is eventually sold, I didn't know that. Seems to me like that raises a number of questions such as how do they allow for a rise in the property market ? What if a property is sold with additional assets such as an office space or as part of a farm ?


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    #4
    Riskymove
    Registered Users Posts: 10,885 ✭✭✭✭Riskymove


    smccarrick wrote: »
    If/when the property is eventually disposed of, the difference would have to be made up, with Revenue's interest rate (currently 8%) compounded.

    is that just for the year it is disposed of?

    I presume we would need to reassess the value of our house over timefor this return?


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    #5
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    IsThisOneFree wrote: »
    OK yes, it's a guideline rather than a valuation - but so is the "valuation" received on their website, so I'm curious why there's a discrepancy. Are they based on different information ? And if so, is one considered to be more accurate than the other ?

    Interesting that you have to make up the difference if the property is eventually sold, I didn't know that. Seems to me like that raises a number of questions such as how do they allow for a rise in the property market ? What if a property is sold with additional assets such as an office space or as part of a farm ?

    Inflation will determine property price rises if/when they occur- and can be worked backwards to figure when a property crossed bands from the final sale price.

    Vis-a-vis a residence on a farm- there is a pre-existing calculation- the 1/2 acre on which the residence is- is used for valuation purposes.

    Seeing as we're already talking about revising the manner this is calculated from a purely financial one- of course these may change.


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    #6
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Riskymove wrote: »
    is that just for the year it is disposed of?

    I presume we would need to reassess the value of our house over timefor this return?

    No- the valuation will be worked backwards- and if it was originally claimed in the wrong band, there can be penalties, alongside the 8% interest rate, applied. Revenue have informally said they will be lenient on people who are out by a band- but will take a dim view of people massively undervaluing property and apply appropriate penalties. The belief is they will make an example of a few people and frighten others into compliance.


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    #7
    Bullseye1
    Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    Isn't the value based on a three year period? Will a new valuation return not be necessary in three years anyway so while you maybe in band 2 this time round in three years you might value upwards to band 3. They really have not thought this one out.


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