Property tax Exemption for self build

Villain

FYI from Revenue's FAQ on the new property tax, some good news for a change

3.4 Are new properties that are built by the owner (self builds) exempt from
LPT?
• If the property has been completed before 1 May 2013, the property will be subject to LPT, unless the person who self-builds the property is eligible for first time buyer exemption and occupies the property as his or her sole or main residence.
• Any residential property built by its owner after 1 May 2013 and before 1 November 2016, will not be liable for LPT until 2017.

New build in sight

Do you think this refers to start date or completion date?

This is good news!

sydthebeat

New build in sight wrote: »

Do you think this refers to start date or completion date?

This is good news!

i would harbour an assumption that its the date of commencement, as its the only statutory notice given.

Villain

I'm not sure, built after 1st of May is a bit open, I would hope its completion date. I got a letter for the household charge last year I called and said the house was still been built they said it wasn't applicable.

blast06

sydthebeat wrote: »

i would harbour an assumption that its the date of commencement, as its the only statutory notice given.

I would say that is very unlikely, otherwise section 3.4 is very very poorly worded, i.e.: the 2nd bullet point uses the word 'built' which by dictionary.com means "simple past tense and past participle of build" (my emphasis in bold).... i.e.: building phase has complete and thus the house is 'built'

Villain

The act isn't very clear, the relative section Part 2 -6 states:

6.—A residential property shall not, for the purposes of this Act, be regarded as a relevant residential property where the property—
(a) has been completed but not sold by the person who has constructed the property, or who has had the property constructed,
(b) is not occupied as a dwelling,
(c) has produced no income that would be chargeable to income tax or corporation tax, as the case may be, under Case I, Case IV or Case V, as the case may be, of Sched- ule D (within the meaning of section 18 of the Act of 1997), and
(d) is trading stock (within the meaning of section 89 of the Act of 1997) of the person referred to in paragraph (a).

From http://www.oireachtas.ie/documents/bills28/acts/2012/a5212.pdf

(b) is not occupied as a dwelling,
That on the 1st of May would lead me to believe once the house is finished after the 1st of May it's exempt until 2017, but I'm no Legal expert!

sydthebeat

Villain wrote: »

The act isn't very clear, the relative section Part 2 -6 states:


From http://www.oireachtas.ie/documents/bills28/acts/2012/a5212.pdf

(b) is not occupied as a dwelling,
That on the 1st of May would lead me to believe once the house is finished after the 1st of May it's exempt until 2017, but I'm no Legal expert!

they will have to be very prescriptive about how they determine ' finished after the 1st of may' then..... Because if not there will be shed loads of houses completed in the last while that will claim 'uncompleteness'.

Unless they use some prescriptive measure such as esb meter commissioning, (data protection?) the only statutory informed date they have to go by is the comencement notice date.

blast06

Any updates on this folks ?

Villain

I called revenue they said if the house wasn't finished by May 1st then its exempt, I asked what they regarded as finished and they said if its not ready to live in.

Seems to me like the tax, it's self declaration so if you declare its not finished they accept that but if they audit you then you will need some proof.

DeJaMo

I also called the revenue about this. The person I spoke to wasn't sure and had to ask their supervisor. The response I got was that 'completion' meant having water and electricity. The person went on to say it was self assessment so there's the option for the house holder to justify non completion by 1st May.....Either way, first time mortgage holders are except, right??

Villain

Well that depends, my first draw down of my Mortgage was years ago.

In simple terms from what I have read any "Residental Property" that is exists on the 1st of May is liable for Property tax, if the house in your opinion is not finished it is not a residental property and thus exempt.

You need to be able to justify that though if the Revenue question it, the same as if you value your property at 150k you have to be able to justify how you gave that as an honest figure based on the information available to you.

woodoo

What if someone paid the household charge and their house wasn't finished?

Villain

Well that would be rather silly, I called them told them it was a site and they apologised and took me off the list.

Villain

Update.

I got a LPT form for my site, called the support number and got incorrect advice which I won't bother sharing to save confusion. Chased it up as I wasn't confident advice was correct and eventually spoke to someone actually in Revenue as opposed to those on "FAQ" line.

The booklet doesn't list self build houses completed after 1st of May in its exemptions list yet section 3.4 of the main FAQ states that such houses/sites are exempt. In essence the Revenue didn't list as an exemption in the booklet as they didn't expect people in that scenario to receive a form, so advice was not to complete form looking for an exemption but to reply with cover letter stating the house is not complete.